Wynn Resorts reported a decline in revenue for the third quarter of 2022, with figures dropping 10.5% from $994.6 million to $889.7 million for the period ending September 30. The company incurred a net loss of $142.9 million, equating to a loss of $1.27 per share. This represents a 14% decrease in losses year-on-year from $166.2 million in Q3 2021, though the recent quarter saw losses increase 9.8% from $130.1 million in the previous quarter. Despite the losses, the company's adjusted earnings before interest, tax, depreciation, or amortisation (EBITDA) rose by 12.2%, from $154.6 million to $173.5 million, indicating the potential long-term health of its portfolio.
The primary factor contributing to Wynn's net loss is the ongoing underperformance of its Macau properties, where the company is one of six concessionaires. The global gambling hub has faced significant challenges in 2022 due to continued Covid-related restrictions, resulting in a dramatic 95% year-on-year revenue decline to $49.2 million in July, described as the worst month ever for the region.
Wynn CEO Craig Billings commented, "In Macau, while Covid-related travel restrictions continued to negatively impact our results, we were pleased to experience encouraging pockets of demand during the recent October holiday period. We remain confident that the market will benefit from the return of visitation over time."
Travel to Macau has plummeted due to more restrictive visa laws and ongoing concerns regarding Covid policies. Although some restrictions on e-visas and group visas were relaxed in certain provinces earlier in the month, a lockdown at MGM Resorts’ MGM Cotai highlighted the continued uncertainty in the sector. The new visa regulations include a “circuit breaker” mechanism that could suspend the rules in the event of a new outbreak.
Wynn president Ian Coughlan expressed optimism regarding the government's response to recent outbreaks, noting, "When we had an outbreak in the summer, and we had a casino closure, there was a six-week cycle of closure and recovery. The government has managed to turn it around in two weeks this time. We are starting to see a buildup in occupancy this coming weekend, which indicates we are coming out of our recent outbreak. I believe we will see the e-visas trickle in over the next couple of weeks and then pick up pace in the coming months."
In contrast, Wynn's operations in the United States have shown resilience, helping offset challenges faced in Asia. Billings highlighted, "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."
Billings also remarked on the recent investment by Tilman Fertitta, stating, "Kudos to him because he’s done quite well since he appears to have started acquiring in the second quarter when the stock was excessively cheap. It’s actually right around when we were buying back some stock as well that we reported in our second quarter."
