Wynn Resorts looks to raise cash after taking it on the chin in Macau


Casino operator Wynn Resorts says its Macau properties earned no more than $19m in the first two months of its second quarter, forcing it to raise more cash, pronto.

On Thursday, Wynn filed papers with the US Securities and Exchange Commission announcing its intention to conduct a senior notes offering to professional investors, although it couldn’t yet say how much these notes would cost nor how much the company hoped to raise via this offering.

However much change this offering puts in Wynn’s pocket, the company plans to use it to pay bills while it recovers from the impact of the COVID-19 pandemic, as well as repay a portion of the outstanding amounts of Wynn Macau’s credit facilities.

Wynn also offered a hint of the performance of its Wynn Macau subsidiary – which is 72% owned by the parent company – in the months of April and May. The company expects the combined revenue of Wynn’s two Macau properties to come in between $17.9m and $19m, down from $759.7m in the same two-month period last year. Ouch.

On an earnings basis, Wynn expects a loss of up to $126.1m compared to $215.2m in positive earnings last year. As mentioned in its Q1 report card, Wynn’s Macau operations are currently losing around $2m per day versus an average $3.5m daily gain last year.

Proving that fate loves nothing better than kicking you when you’re down, the few customers that did show up at Wynn Macau’s tables played luckier than usual. The company said the table game win percentage negatively impacted earnings by $24m in April-May, twice as much as the negative impact one year ago.

Wynn tried to boost investors’ spirits by noting that some of the travel restrictions that have kept Chinese gamblers away from Macau are beginning to be lifted as COVID-19 infection rates stabilize.

Macau’s overall casino market has endured eight consecutive months of negative growth, with the last two months posting declines of over 90%. The year-to-date decline is nearly 74%, which means there’s really almost nowhere to go but up.

That is, unless you’re Wynn Resorts stock price, which fell 9.3% on Thursday, part of a broader selloff of the overall market. Wynn’s decline was actually better than competitor MGM Resorts, which fell 13% on Thursday, while rivals Las Vegas Sands, Melco Resorts & Entertainment and Boyd Gaming were all down 5-6%.