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Wynn posts $1.04bn loss in H1 amid global Covid-19 closures


Casino operator Wynn Resorts has reported a net loss of $1.04bn for the first half of the year, after the novel coronavirus (Covid-19) pandemic forced the temporary closure of its venues in the US and Macau. 

Total operating revenue in the six months to June 30 amounted to $1.04bn, down 68.6% from $3.31bn in the corresponding period last year.

Though Wynn did not publish regional results for the first half, it said that the pandemic had an impact on all of its properties, with each having had to close for a period in line with regulations aimed at slowing the spread of Covid-19.

Macau-based operations at the Wynn Palace and Wynn Macau were halted on February 5 and did not resume until February 20, albeit it on a reduced basis. Operations are yet to be fully restored, with Wynn still facing a host of measures such as traveller quarantines, limited table game capacity and slot machine spacing.

It is not yet clear when these measures will be lifted, but on July 15, authorities eased certain quarantine requirements for those traveling between Guangdong Province and Macau.

In the US, the Wynn Las Vegas in Nevada temporarily closed on March 17 and did not reopen until June 4, again with a number of restrictions in place, in line with state orders. The Encore Boston Harbor in Massachusetts ceased all operations and closed to the public on March 15, and did not reopen again until July 12, after the reporting period had ended.

The shutdown of its casinos meant operating costs were lower for Wynn in the first half, with the operator spending a total of $1.81bn, down 36.3% year-on-year.

Casino expenses were still the main outgoing for Wynn at $573.8m, but this was 61.1% less than in 2019. Rooms and food and beverage costs were also lowered, while general and administrative costs were down 7.9% to $386.4m.

However, depreciation and amortisation charges jumped 29.3% to $358.0m, while Wynn also accounted for $49.0m in provisions for credit losses, as well as $33.8m in property charges for the period.

Such was the impact of the sharp drop in revenue that Wynn ended the first half with an operating loss of $770.4m, compared to a profit of $473.9m at the same point last year.

When accounting for expenses, including interest expense, loss before tax stood at $1.03bn, a stark contrast to a profit of $302.0m in 2019. Though Wynn did secure tax benefits totalling $156.7m for the period, this, was all-but cancelled out by a loss $145.5m from non-controlling interests, meaning it was left with a net loss of $1.04bn, compared to a profit of $199.4m last year.

Wynn chief executive Matt Maddox said that despite posting losses in the first half, the operator is pleased to be back up and running in all of its markets, adding that it has seen a positive response from customers.

“In early June, we reopened nearly our entire Wynn Las Vegas and Encore campus with an intense focus on cleanliness and safety,” he said. “Similarly, in Boston, we reopened Encore Boston Harbor on July 12 to a positive reception as many of our customers currently prefer to stay close to home.

“In Macau, the authorities have begun to gradually and thoughtfully ease some visitation restrictions, and we are confident the market will benefit from the return of the Chinese consumer as we move through the back half of 2020.”

Looking more closely at Wynn’s performance in the second quarter, revenue was down 94.8% year-on-year to $85.7bn, again as a result of Covid-19 closures and restrictions.

In Macau, Wynn Palace revenue dropped 98.6% to $8.7m in the three months to June 30, while revenue at the Wynn Macau also fell 97.8% to $11.9m. Meanwhile, in the US, Wynn Las Vegas revenue dropped 86.0% to $64.9, while the operator did not disclose a revenue figure for its Encore Boston Harbor property.

Operating costs were 57.7% lower at $608.7m, but Wynn still saw an operating loss of $523.0m. After other expenses, loss before tax was $653.9m, while loss after tax, including losses from non-controlling interests, stood at $637.6m, compared to a $94.6m profit last year.

“Our leadership team continues to work closely with our host communities, fellow industry leaders and world-class medical experts to implement and advance strategies to mitigate the impact of the virus on our team members, our guests and our broader communities,” Maddox said.