Casino operator Wynn Macau is anticipated to generate approximately $917 million in adjusted EBITDAR in 2023.
This forecast is based on the financial results for the first half of 2023, as the research team believes that Wynn Macau’s business continues to benefit from a robust recovery, which has been gaining momentum on a monthly basis since China lifted its COVID travel restrictions in early January.
According to an investment memo from CreditSights, a division of the Fitch Group, Wynn Macau’s projected adjusted EBITDAR exceeds both the original base ($632 million) and bull ($892 million) cases.
“The increase reflects Wynn Macau‘s significant margin improvements (2Q23 EBITDA margins were up 300 basis points compared to 2Q19), driven by a shift in the mix towards the more margin-friendly mass market, higher-than-expected business volumes, and improved cost efficiencies,” notes CreditSights.
The analysis highlights that the ongoing recovery in Macau has been the latest bright spot in Wynn’s portfolio and the primary driver of growth, maintaining its acceleration through 2Q23.
“This includes further enhancements in monthly visitations and GGR, which have extended into 3Q23. Remarkably, Wynn’s daily mass drop reached 120 percent of 2019 levels in July.”
The rating agency suggests that the strong performance in the mass segment might be attributed in part to “the decline of the junket-sourced VIP segment, which has redirected more customers into the mass segment.”
Simultaneously, Macau EBITDA margins are outpacing 2019 levels, reflecting “this shift in focus to the mass segment (a higher-margin sector) and improved cost efficiencies.”
In the first half of 2023, Wynn Macau generated $402 million of EBITDA. Additionally, Wynn Macau reported consolidated income of $127.5 million in 2Q23, marking a 171 percent increase compared to the first quarter and extending its post-pandemic recovery momentum. This also signifies a notable improvement from the $181.2 million in losses posted during the same period last year.
