Casino operator Wynn Resorts lost nearly $73m in the final quarter of 2019 and Macau’s casino shutdown is burning $2.5m per day off the company’s books.
On Thursday, Wynn reported that its revenue in the final three months of 2019 hit $1.65b, a 2% decline from Q4 2018. The company booked a net loss of $72.9m versus a $465m profit one year ago, although the 2018 profit got an artificial $391m boost from Donald Trump’s tax cuts.
For 2019 as a whole, revenue was down a modest 1.5% to $6.6b but net income plunged 78.5% to $123m, again, reflecting the wind assist the previous year’s results got from Trump’s tax giveaway.
In Macau, the Wynn Palace casino reported Q4 revenue falling one-fifth to $590m and earnings down 21.6% to $177.6m. VIP gambling turnover slumped 42.4% and VIP revenue slid 45.5% to $286.3m. Mass market table win managed a 2.6% rise to $315.4m while slots added $53.1m.
The newer Wynn Macau property performed better, with revenue down 5.1% to $525.4m while earnings inched up 1.5% to $170m. The same segment dynamics were at play here as well, with VIP win down 28.8% to $259.7m while mass table win gained 10.7% to $283.2m.
Stateside, Wynn’s Las Vegas operations reported revenue falling 23.8% to $368.8m, largely due to slumping gaming revenue, presumably due to a dearth of Asian VIPs crossing the pond. Vegas earnings were down nearly one-quarter to $80.1m.
In Massachusetts, the new Encore Boston Harbor added revenue of $169.3m, of which $116m was from gaming, while earnings came in at $15.2m. The property’s hotel rooms reported a disappointing 76% occupancy rate.
CORONAVIRUS WEIGHS HEAVY
Speaking on the analyst call, Wynn CEO Matt Maddox didn’t sugar-coat the situation in Macau, saying the 15-day casino closure imposed by the local government to prevent further spread of the coronavirus was costing the company between $2.4m to $2.6m per day, mostly in payroll expenses.
Maddox resisted invitations to predict whether the shutdown might continue past its stated end date, nor when business in Macau might be back to normal. But Maddox said Macau was “set up for a really great rebound,” leaving the company feeling good about Macau’s “long-term aspects.”
Maddox said a number of Wynn’s Asian VIPs who’d traveled to Vegas for last month’s Lunar New Year celebrations are now basically stuck there due to China’s travel restrictions. Maddox said these VIPs were now “travelling from one location to another location,” and while they may visit other Vegas casinos, “we expect them to come back as they continue to play.”