Forced to temporarily shutter due to the coronavirus crisis,
Wynn Resorts’ Macao business is currently burning through $2.4 million to $2.6 million
in operating expenses each day, according to Wynn Resorts CEO Matt Maddox.
Maddox gave analysts color on the situation in Macao during
Wynn Resorts’ 2019 year-end earnings call last week, commending Macao officials
for their decision to mandate a two-week shutdown of the city’s casinos earlier
this month. Macao’s casino operators ceased operations at midnight on Feb. 5.
“We’re in daily conversations with the government, they’ve
been extremely transparent, and they’ve been terrific partners with us as we
focus on the safety of everyone in Macao,” said Maddox. Wynn Resorts’ Macao
holdings comprise the Wynn Macau, the adjacent Wynn Encore tower and the Wynn
Maddox added that the majority of the group’s Macao costs
are currently tied to roughly $1.8 million to $1.9 million a day in payroll, and he
asserted that the company has no plans to curb that spending.
“We are not looking at cutting that at all,” he explained. “Now
is the time you invest in your people, and you don’t do something short-term
that will hurt the culture. We know this will be temporary, and we think it is
the right long-term investment.”
Wynn Resorts president and CFO Craig Billings was confident
that Wynn Resorts would be able to weather a potential extension of the casino
“Business interruption insurance must relate to a physical
event that caused the business interruption -- a storm or some other kind of
damage -- and that obviously isn’t the case here, so we don’t expect material
business-interruption coverage proceeds,” said Billings. “But we have a ton of
liquidity. We have a couple billion dollars of availability ... that’s more
than sufficient to last for really any period of closure.”
Operating revenues at the Wynn Macau were down 5.1%, to $525.4
million, for the three months through Dec. 31, while operating revenues at the
Wynn Palace fell 20.3%, to $590 million, during the same period.
Companywide, Wynn Resorts recorded a $72.9 million net loss
for the fourth quarter, versus a net income of $464.8 million during the same
quarter in 2018. For the full year, net income was down more than 78%, to $122.9