Wynn Macau says it expects to record an Adjusted EBITDA loss for the months of April and May 2020 of between US$126.1 million and US$118.8 million due to the impact of border restrictions from COVID-19. The expected loss compares with Adjusted EBITDA of US$215.2 million for the same period in 2019 and represents a year-on-year decline of approximately 157%.
The business update was provided in a Thursday filing on the Hong Kong Stock Exchange in which Wynn Macau revealed plans to conduct an offering of notes to investors, to be used for general corporate purposes until the business recovers from the effects of the COVID-19 pandemic, and to repay a portion of the amounts outstanding under its credit facilities.
Wynn Macau said it expects total operating revenues for April and May to be between US$17.9 million and US$19 million, down from US$759.7 million in the 2019 period, with the average daily Adjusted EBITDA loss at US$2 million.
“We estimate table games win percentage negatively impacted Adjusted Property EBITDA by approximately US$24 million for the two months ended 31 May 2020 compared to a negative impact of US$12 million for the comparable 2019 period,” the company said.
While such losses are set to continue until at least July, when Hong Kong is due to revisit its own border control policies in regards to a possible travel bubble with Macau and Guangdong Province, Wynn Macau added that its premium leanings would serve it well once border restrictions start to ease.
“We believe the recovery in Macau will be driven by the premium guest,” it said. “For example, in the five-week period following the reopening of our properties on 20 February 2020, gross gaming revenues was approximately 25% of the historical gross gaming revenues run-rate, which was driven primarily by our VIP and premium mass market guests, despite significant travel restrictions.
“During this period, our daily Adjusted Property EBITDA loss decreased to approximately US$800,000 while our daily operating costs were approximately US$2.5 million during the closure period. We expect to achieve break-even Adjusted Property EBITDA upon reaching between 45% to 50% of our historical gross gaming revenues run-rate.”