Casino operator Wynn Resorts admits that it’s bleeding red ink as a result of the COVID-19 pandemic but insists that the company can bleed for a long time before dying.
On Tuesday, Wynn filed papers with the US Securities and Exchange Commission noting that the company incurred cash operating expenses of $2.5m per day, excluding cash interest expense of $500k per day, during the government-ordered 15-day closure of its Macau casinos in February.
Despite those Macau properties having since reopened, Wynn said that “certain health safeguards” to minimize further COVID-19 spread remain in effect. As a result of these safeguards, along with travel restrictions from mainland China, the company expects “to continue to incur such cash costs in excess of the amounts we are earning at our properties.”
In the US, Wynn’s operations in Las Vegas and Boston remain closed and the company recently committed to paying its 15k furloughed employees through May 15. The cost of doing so, along with other cash operating expenses of its US properties, total around $3.5m per day, excluding $800k of cash interest expense.
Wynn says it has nearly $3b in cash and equivalents on hand to help it through this current crisis, but both its US and Macau operations drew additional funds from their respective credit facilities this month. Wynn also announced a new notes offering intended to raise an additional $600m, just in case. The offering was originally limited to $350m but was bumped up the same day.
Wynn said its Q1 financial figures are not yet complete but revenue is expected to come in between $912m and $969m, a significant reduction from the $1.64b reported in Q1 2019. Adjusted earnings are expected to range from $58m to $65m, down from $484m in Q119.
Investors appear to have feared far more dire numbers, as Wynn’s share price is currently up nearly 13% at time of writing.
