Wynn Resorts painted a bleak picture Thursday morning of its operations in Macau over the last two months due to continuing fallout from the COVID-19 pandemic, but analysts said lifting certain travel restrictions into the region could improve the company’s prospects.
In a filing with the Securities and Exchange Commission, Wynn said its operating revenues from its three Macau properties – Wynn Macau, Encore, and Wynn Palace – for April and May would between $17.9 million and $19 million. A year ago, Wynn said its revenues for the same three properties was $759.7 million.
The company filed the preannounced second-quarter earnings as part of a proposed debt raise, in which the pricing, terms, and conditions have yet to be determined. Wynn’s official second-quarter earnings will also include June.
The Las Vegas-based casino company said its adjusted cash flow in Macau for the two months was a loss of between $118.8 million and $126.1 million, compared to cash flow of $215.2 million a year ago.
“The impact of the COVID-19 pandemic has persisted into the second quarter of 2020,” the company said in the filing. “We expect to continue experiencing the adverse effects of the COVID-19 pandemic throughout the second quarter.”
The announcement by Wynn came as the stock market had a massive sell-off, sparked by an increase in coronavirus infections in states emerging from pandemic-fueled restrictions coupled with the Federal Reserve’s projections of a slow and bumpy recovery.
The Dow fell more than 1,800 points Thursday – a decline of 6.9% – while Wynn, along with the entire gaming sector, took a tumble. Wynn closed at $89.74 on the Nasdaq, down $9.19 or 9.29%.
Macau’s gaming market has seen revenues decline almost 74% through the first five months of 2020 due to the coronavirus outbreak in China. The slide began in January, when the first signs of the outbreak forced cancellations of the market’s lucrative Chinese New Year celebrations. In February, casinos were closed for 15 days due to a government-ordered shutdown.
However, analysts said there were positive signs that travel restrictions, which have led to a nearly 99% decline of visitation into Macau since February, are gradually being eased. Macquarie Securities gaming analyst said access to Macau from the Guangdong region would be a boost, since the area accounts for between 30% and 40% of Macau’s mass-market revenues.
“The Zhuhai province eased Macau border restrictions, allowing business and special travel without a mandatory quarantine period,” Beynon said in a note to investors. “Quarantine requirements for those traveling from Hong Kong will remain until at least July 7, at which time they may be lifted.”
Beynon said executives from Las Vegas Sands, which also has large holdings in Macau, noted at a recent conference its expectations that the next stage of easing will include business visa holders in Guangdong, followed, potentially, by group visas.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
