Wynn Macau Suffers $154m Q1 Loss Over COVID-19

  • Casino operator went from net profit of $190.6m in Q1 2019 to net loss of $154.2m in Q1 2020
  • Ongoing coronavirus pandemic said to be main reason for dramatic revenue turnaround 
  • Border and travel restrictions between Macau and mainland China also a contributing factor
  • Wynn hopeful of quick Macau rebound due to its focus on premium patrons vs. high volumes
graph showing revenue drop
Wynn Macau Ltd posted a net loss of $154m in Q1 2020, compared to a net profit of $190m in Q1 2019. [Image: Shutterstock.com]

Pandemic hitting hard

Wynn Macau Ltd posted a net loss of $154.2m during the first quarter of 2020. For the same period in 2019, the casino operator had a net profit of $190.6m. The figures were released as part of its parent company Wynn Resorts Ltd’s first-quarter report, published on Wednesday. 

The main reason for the dramatic turn in fortunes for Wynn Macau Ltd was the ongoing coronavirus pandemic. Gambling facilities around the world have been massively affected to date, with casinos in Macau forced to closed for 15 days in February. Visitor numbers and casino revenue in Macau have remained very low in the intervening months as restrictions remain in place.

The company’s Wynn Palace Casino property saw operating revenues drop by 64% for the period. Revenue was $259m in the first quarter of 2020, compared to $726.6m for the previous year. Its VIP table win percentage was 2.91%, falling within the expected range of 2.7% to 3%. However, VIP turnover fell by almost 71% down to $2.96bn.

More struggles ahead

While some of the border restrictions between Macau and mainland China have been eased, analysts believe it will take a long time before casino and visitor numbers get back to pre-pandemic figures. 

costing Wynn Resorts between $2m and $2.5m every day

Macau’s low figures are costing Wynn Resorts between $2m and $2.5m every day, according to chief financial officer and president Craig Billings. This daily loss is expected to last until visa schemes are reimplemented and there is a full reopening of transit to and from Hong Kong. 

There are also restrictions in place on the casino operations. Wynn’s Macau gambling properties now have limits on the number of seats per table games and the spacing of slot machines. They are also carrying out customer temperature checks and other health measures. There is currently no defined timeline as to when the restrictions might be eased.

Sufficient liquidity for Macau operations

Wynn’s Macau facilities have sufficient liquidity for now, with $1.8bn available as of April 30. Billings is hopeful that these operations are well-positioned to rebound due to their focus on premium clients rather than high visitor volumes. 

Wynn Resorts is based in the United States and it operates the likes of the Encore Boston Harbor Casino and the Wynn Las Vegas. The group as a whole had a net loss of $402m for the first quarter of 2020, compared to a net profit of $104.8m in the previous year for the same period. As a result of the COVID-19 pandemic, the company suspended its quarterly dividend. It still reported cash reserves of $2.89bn as of March 31.