Wynn posts revenue down by 10% amid Macau restrictions; US performance remains strong

Wynn Resorts has shared its results for the third quarter of the year. For the period ended September 30, the company delivered revenues of $890 million, a decrease of $104.9 million (10.5%) from Q3 2021. The net loss attributable to the firm in the period was $142.9 million, or $1.27 per share, reduced from a net loss of $166.2 million last year. While the third-quarter results were boosted by Wynn’s U.S. properties, Macau operations continued to take a hit.

"Our teams at Wynn Las Vegas and Encore Boston Harbor delivered a new third-quarter record for Adjusted Property EBITDA at our combined North American properties. Their relentless focus on five-star hospitality, combined with our market-leading facilities, continue to elevate our properties above our peers as the destinations of choice for luxury guests in both Las Vegas and Massachusetts," said in the Q3 report Craig Billings, CEO of Wynn Resorts.

As for Macau, Covid continued to negatively impact the company’s results. Casino operations at Wynn Palace and Wynn Macau were closed for a 12-day period in July, in response to an outbreak of COVID-19 in the city, which adheres to China’s strict Covid-zero policy. The results were affected by certain travel-related restrictions and conditions, including testing and other mitigation procedures related to the pandemic.

Wynn Palace

As a result, revenues from Wynn Palace decreased by $106.1 million from Q3 2021, amounting to $75.2 million this year; while Wynn Macau dropped by $90.3 million to $40.4 million. Despite this, Billings said the company experienced “encouraging pockets of demand” during the recent October holiday period, typically one of the strongest times for the hub in the year. “We remain confident that the market will benefit from the return of visitation over time,” the CEO added.

In contrast, Wynn’s Las Vegas operations increased by $68.4 million to $544.4 million in revenue for the third quarter of the year. And the company’s Massachusetts property, Encore Boston Harbor, delivered $211.8 million in revenue, increasing by $19.6 million from the same quarter in 2021. However, the positive US performance wasn’t enough to satisfy the markets, which reacted negatively to the ongoing Macau setbacks and 10.5% overall revenue drop.

The casino operator’s share price fell 3.9% from $69.03 per share to $66.35 per share in after-hours trading. Macau might be to blame, with 2022 proving a difficult year for the gambling hub, which experienced its worst-ever month in July, with revenues declining 95% year-on-year. However, going forward, the company – and other Macau operators – could benefit from the relaxation of restrictions for e-visas and group visas in certain provinces.

Craig Billings

Looking to the future, the company is also moving forward with its efforts to bring casino gaming to the UAE with its new project in Ras Al Khaimah. Wynn Marjan is planning its upcoming property in the region, while the emirate’s authorities write their gaming laws, using Singaporean and US regulations as the foundation, according to Hotelier Middle East.

“We certainly don’t want to underbuild the casino,” Billings told investors this week. “The casino component, where at least for some period of time, we will be operating on our own, which makes it quite exciting is shaping up to be somewhat larger than Wynn Las Vegas, but with numerous pockets of energy and compression.”

Wynn Marjan, which targets a 2026 opening, would boast a casino around 18,500 sq m in size, according to early plans. The facility would be one of the biggest in the world for its type, almost double the size of Wynn’s Vegas property. Billings said “regulations are well advanced,” and that the tax rate and license structure are “very reasonable.”

See Wynn Resorts' full Q3 2022 results here.