Wynn Resorts Reports Better October EBITDA, Revenue in Macau Helped by Higher Table Games Win Percentage
Posted on: December 9, 2019, 07:55h.
Last updated on: December 9, 2019, 10:46h.
Wynn Resorts, Ltd. (NASDAQ:WYNN) stock took a beating in the third quarter amid a slowdown in Macau. While broader gross gaming revenue (GGR) numbers for the Chinese territory have slumped over the past couple of months, the operator is reporting a solid October showing.
In a Form 8-K filing with the Securities and Exchange Commission (SEC) that was published earlier today, Wynn forecast higher earnings before interest, taxes, depreciation and amortization (EBITDA) and revenue for October 2019 for its two Macau properties compared with the year earlier period.
Based on preliminary information through 31 October 2019, the Group currently expects total operating revenues of Wynn Resorts Macau operations to be in the range of $421.6 million to $430.2 million for the month ended 31 October 2109, compared to $403.4 million for the month ended 31 October 2018,” said the company in the SEC filing.
For the tenth month of 2019, the operator forecast EBITDA of $135.9 million to $138.6 million, well above the $113.4 million notched in October 2018.
A Good Start
There are about three weeks left in the fourth quarter, but Wynn’s update for the first month of the period is positive, particularly when considering the company’s dismal third-quarter results, which were largely attributable to sluggishness on the peninsula.
The bullish October update also stands in stark contrast to what the company offered up in September, when the operator of the Wynn Palace and Wynn Macau said July and August EBITDA and turnover would miss the year earlier levels by wide margin. Those forecasts proved to be harbingers of weak overall third-quarter results.
An improved table games win percentage helped steady Wynn’s results in October 2019.
The Group estimates table games win percentage positively impacted adjusted property EBITDA of Wynn Resorts, Limited’s Macau operations by approximately $11 for the month ended 31 October 2019 compared to negative impact of approximately $14 million for the comparable period in 2018,” according to the SEC filing.
Wynn’s update comes after reports indicated GGR on Macau slumped 8.5 percent to $2.8 billion last month, making November the worst month of the year to that point for the world’s top gaming hub.
Wynn added that some previously announced alterations at the West Casino in Wynn Macau debuted last month, including the addition of 44 mass market table games and a new high rollers slot area. The company added that new dining and retail options there will be launching this month and into early 2020.
A refresh of 410 rooms at Encore Tower in Wynn Macau that started in the second quarter is also expected to be finalized this month. That effort is estimated to have cost $133 million as of Oct. 31.
Wynn did sound somewhat of a cautious tone on the October data, noting that the month is usually one of the strongest of the year in Macau, and that reported results could differ significantly from the forecast issued in the filing.
Preliminary financials for November and December aren’t yet available, said the company.