Operator News

China – Cost controls leave Wynn’s EBIDTA in its ‘best ever position’

By Phil - 5 February 2021

Wynn Resorts has said the progress made in its fourth quarter has left the company’s EBITDA in its best ever position.

Matt Maddox, CEO of Wynn Resorts, said: ““We clearly made progress in the fourth quarter of this year as all of our properties were actually EBITDA positive. I think, our company is in the best position it’s ever been in to translate revenue into EBITDA as more of the business comes back because it’s going to. We anticipate growth month over month in each of our markets and we are well positioned with the way that we’ve streamlined our business.

“If you look at Macau, we generated $39m of EBITDA for the quarter. And Macau is continuing to see progress. The government, there has been very thoughtful and very cautious as to the way that it’s been allowing people into Macau. And we feel confident that that growth is going to continue.”

The operator reported an operating loss of $269.5m for the fourth quarter of 2020 with revenues coming in at $686m for the fourth quarter of 2020, a decrease of 58.5 per cent, or $967.5m, down from $1.65bn for the fourth quarter of 2019.

Operating revenues decreased $368.5m, $343.5m, $196.2m, and $65.4m at Wynn Palace, Wynn Macau, our Las Vegas Operations, and Encore Boston Harbor, respectively, from the fourth quarter of 2019.

Mr. Maddox added: “We are encouraged by the progress we have made at each of our properties over the past several months, as we continue along the road to recovery from the pandemic. In Macau, the gradual and thoughtful easing of visitation restrictions allowed us to return to Adjusted Property EBITDA profitability in the fourth quarter, with particular strength in our premium mass business. In the US, our operations at both Wynn Las Vegas and Encore Boston Harbor were resilient as we continue to deliver our industry-leading service, while remaining focused on costs. On the development front, our WynnBet online casino and sports betting app is currently available in three states following successful launches in Colorado and Michigan, with additional launches planned over the coming months. We believe our product will be increasingly compelling with each release over the coming months and look forward to growing the business in 2021.”

“One of the positives of 2020 was that we’ve been able to spend a lot of time thinking about the future of Macau and really what the growth drivers are going to be going forward. And it’s crystal clear that the growth drivers for Macau are really the sweet spot of our company and that’s the premium segment – premium mass, in particular,” he added.

Craig Billings, President and Chief Financial Officer, added: “Our EBITDA was driven by encouraging gaming and non-gaming performance, as well as a continued focus on cost controls. Gross gaming revenue in Q4 2020 was approximately 32 per cent of Q4 2019 levels led by the premium mass segment.”

In Macau, Wynn posted an operating loss of US$74.3m for the quarter but with border restrictions being lifted, Wynn Palace and Wynn Macau have both seen improvements with combined Adjusted Property EBITDA of US$39.4m compared to a loss of US$112.1m in the third quarter of 2020.

Wynn Las Vegas ceased all operations and closed to the public on March 17, 2020, and reopened on June 4, 2020 with certain COVID-19 specific protective measures in place, such as limiting the number of seats per table game, slot machine spacing, temperature checks, mask protection, and suspension of certain entertainment and nightlife offerings. Beginning October 19, 2020, Encore at Wynn Las Vegas adjusted its operating schedule to five days/four nights each week due to currently reduced customer demand levels.

The operator said: “We are currently unable to determine when certain of these measures will be lifted. Operating revenues from our Las Vegas Operations were $172.5m for the fourth quarter of 2020, a 53.2 per cent decrease from $368.8m for the fourth quarter of 2019. Adjusted Property EBITDA from our Las Vegas Operations for the fourth quarter of 2020 was $21m, compared with $80.1m for the fourth quarter of 2019. Table games win percentage was 24.4 per cent, within the property’s expected range of 22 per cent to 26 per cent and above the 17.4 per cent experienced in the fourth quarter of 2019.

Operating revenues from Encore Boston Harbor were $103.9m for the fourth quarter of 2020, a 38.6 per cent decrease from $169.3m for the fourth quarter of 2019. Adjusted Property EBITDA from Encore Boston Harbor for the fourth quarter of 2020 was $16.7m, compared with $15.3m for the fourth quarter of 2019. Table games win percentage was 20.9 per cent, within the property’s expected range of 18 per cent to 22 per cent and above the 19.2 per cent experienced in the fourth quarter of 2019.Wynn Interactive
In October 2020, Wynn Interactive was formed through the merger of our US online sports betting and gaming business, social casino business, and our strategic partner, BetBull. Following the merger, Wynn Resorts owns approximately 72 per cent of, and consolidates, Wynn Interactive.

Wynn stated: “We believe this transaction positions Wynn Resorts to capitalise on developing opportunities in digital and interactive sports betting and gaming throughout the US, by combining Wynn Resorts’ nationally recognized brand with BetBull’s digital sports betting operational capabilities and technology. Our digital and interactive sports betting app, WynnBET, is currently operational in New Jersey, Colorado, and Michigan. In addition, subject to all necessary legislative authorizations and regulatory approvals, we have secured market access and have submitted an application for licensing in Indiana, have secured market access in Iowa and Ohio, have received conditional licensing in Tennessee, and have submitted an application for licensing in Virginia.”