Macau casino operator Wynn Macau Ltd maintained a daily cash burn of “approximately US$2 million” during the period of travelling restrictions between Macau, Hong Kong and mainland China amid the Covid-19 pandemic, said the firm’s non-executive chairman, Allan Zeman (pictured in file photo), in an interview with business news outlet CNBC.
Mr Zeman said the Macau gaming industry “welcomed” the relaxation of the quarantine arrangements - from 6am on Wednesday (July 15) – between Macau and neighbouring Guangdong province in the mainland. From 6am on Wednesday (July 15), people travelling from Macau to Guangdong province via Zhuhai are no longer required to undergo a 14-day quarantine.
“Obviously business has not been good because the borders have been closed for Hong Kong, Guangdong and China,” the executive told CNBC, referring to Wynn Macau Ltd’s business performance over the past two months. But he noted that the group had “maintained” its staff throughout the difficult trade conditions brought about by the coronavirus health alert.
“We have been burning approximately US$2 million a day,” stated Mr Zeman. Wynn Macau Ltd said in its first-quarter results in May that the group’s daily operating expenses’ burn during the reporting period was US$2.4 million to US$2.6 million per day.
“We are looking forward to – and all the casinos in Macau – welcome this new relaxation,” he said. “It is too early to really give you an estimate [of how the business might pick up] at the moment because we have never faced anything like this.”
JP Morgan Securities (Asia Pacific) Ltd suggested in a July 1 note that Macau’s six gaming operators’ cash burn per month was approximately US$578 million during the second quarter this year. Wynn Macau Ltd’s cash burn per month during the period was approximately US$99 million, the note added.
Despite the relaxation of the quarantine rule, investment analysts have said that “restrictive hurdles” on movement into and out of Macau remain, especially regarding the issuance of visas by the mainland authorities.
In a Wednesday memo, JP Morgan analysts DS Kim, Derek Choi and Jeremy An wrote: “We expect demand from Guangdong can recover quickly to approximately 70 percent of normal levels (equals to 80 percent to 90 percent for VIP; 50 percent to 60 percent for mass) if and when visas are resumed.”
“Most investors that we talked to find this level reasonable, which implies industry gross gaming revenue should improve to 20 percent to 25 percent of 2019 levels (equals to MOP150 million [US$18.8 million] to MOP200 million per day) in coming months (subject to the timing of visa resumption), in order to meet the market’s expectations,” the JP Morgan team added.
Aug 03, 2021The Macau government announced that from 3.30pm on Tuesday (August 3) the region had entered “immediate pandemic prevention” mode, in light of an “extremely high” risk of a...
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