GGRAsia – Wynn Macau Ltd’s loss widens q-o-q but casino revenue up

Wynn Macau Ltd’s loss widens q-o-q but casino revenue up

Feb 16, 2022 Newsdesk Latest News, Macau, Top of the deck

Macau casino operator Wynn Macau Ltd widened its net loss in the final three months of 2021, judged both quarter-on-quarter and in year-on-year terms. The firm posted a net loss of US$208.1 million for the final three months of last year: it compared with a net loss of US$179.9 million in the previous quarter and a net loss of US$144.9 million in the prior year period.

Wynn Macau Ltd’s casino revenues were up 4.7 percent sequentially for the three months to December 31, at US$243.3 million. Judged year-on-year, such revenues were down 16.3 percent, said the firm in a filing on Wednesday to the Hong Kong Stock Exchange. The company operates Wynn Macau on Macau peninsula and Wynn Palace (pictured) on Cotai.

Quoted in a release from parent company Wynn Resorts Ltd, Craig Billings said: “In Macau, we remain confident that the market will benefit from the return of visitation over the coming quarters.”

Mr Billings took over on February 1 as chief executive of Wynn Macau Ltd. The same day, he also became the chief executive of Wynn Resorts, taking over from Matt Maddox.

“There’s not much to read from Wynn Macau Ltd’s fourth quarter given uneven trends amid stricter border controls,” said a note from JP Morgan Securities (Asia Pacific) Ltd, following the casino operator announcing its results.

Mainland China remains the only place to have a largely-quarantine free travel arrangement with Macau. But the city saw a number of temporary travel restrictions in place between late September and October, following new Covid-19 cases confirmed in Macau. Those temporary restrictions included a 14-day compulsory quarantine imposed by the authorities in neighbouring Zhuhai, Guangdong province, on travellers from Macau.

JP Morgan analysts DS Kim, Amanda Cheng and Livy Lyu added in their note that Wynn Macau Ltd’s property earnings before interest, taxation, depreciation and amortisation (EBITDA) were “a negative US$26 million, which however included US$24 million one-off bad debt related to junket closures.”

Junkets – known in Macau as gaming promoters – historically have introduced high-value players to Macau casinos’ VIP gambling operations. But the junket sector has been in the spotlight since November following the detention of Alvin Chau Cheok Wa and the shutdown of his junket brand Suncity Group, and more recently the arrest of Levo Chan Weng Lin, boss of junket brand Tak Chun. Several among the city’s six casino operators – including Wynn Macau Ltd – have confirmed that junkets had ceased operations at their respective properties in Macau.

Brokerage Jefferies Hong Kong Ltd said in a note that Wynn Macau Ltd’s management had noted in a conference call with analysts post its results annoucement, that the company had recorded “strong pent-up demand” during the week-long Chinese New Year holiday period earlier this month. That included “junket customers switching to direct VIP or premium mass, stronger spend per customer, and new customer sign-ups in their direct business,” said analyst Andrew Lee.

According to Wynn Macau Ltd’s management, direct VIP levels during the Chinese New Year period were up 175 percent in year-on-year terms and only 12 percent below the Chinese New Year in 2019, i.e., pre-pandemic.

Total fourth-quarter operating revenues at Wynn Macau Ltd were just under US$325.7 million, versus US$403.4million in the prior-year period. Operating revenues were up sequentially by 8.4 percent.

Wynn Macau Ltd’s fourth-quarter operating costs and expenses reduced to US$451.8 million from US$478.2 million in the prior-year period. Measured quarter-on-quarter, costs expanded by 11.4 percent.

U.S.-based Wynn Resorts also reported its fourth-quarter results on Tuesday. The fourth-quarter net loss attributable to the firm – which also runs Wynn Las Vegas and Encore Boston Harbour in Massachusetts – narrowed to US$755.8 million from US$2.07 billion a year earlier.