Depending on government approvals, the Capex related to Wynn Macau‘s concession commitments could range between $350 million and $500 million in total between 2024 and the end of 2025, according to Julie Cameron-Doe the Chief Financial Officer of Wynn Resorts.
The gaming operator recently revealed its first-quarter results, with a record property EBITDAR of $647 million, with Macau operations delivering adjusted property EBITDAR of $339.6 million in the quarter, and $998.6 million of operating revenue.
Speaking on the group’s most recent conference call, Cameron-Doe pointed out that the group’s liquidity position remains very strong with global cash and revolver availability of nearly $4.2 billion as of March 31st, of which $2.2 billion is in cash and available liquidity in Macau and approximately $2 billion in the US.
‘Over the past four quarters, we’ve reduced company-wide gross debt by approximately $1 billion,’ Julie Cameron-Doe pointed out.
The Wynn CFO also noted that the group’s operational expenses reached $2.63 million per day in the first quarter, “below Q1 2019 levels, and it’s only up 3 percent sequentially”.
‘In terms of Capex in Macau, we’re currently advancing through the design and planning stages on several of our concession commitments. And as we noted the past few quarters, these projects require a number of government approvals, creating a wide range of potential Capex outcomes in the near term’
In 2019 Wynn announced a $2 billion expansion of its Cotai integrated resort, Wynn Palace, which was to include a 650-room hotel and “Crystal Pavilion” but was placed on hold due to the Covid-19 pandemic.
In a separate dispatch, brokerage Seaport pointed out that Wynn’s Capex in Macau will ‘begin to escalate over the next two years as the company begins extensive non-gaming investment’ which it considered will provide for ‘positive ROI and value creation’.
Wynn Macau has committed to invest MOP17.8 billion ($2.2 billion) during the 10-year term of its next Macau casino concession from 2023 to 2032, of which around 93 percent, is planned to be for expanding international markets and further diversification of non-gaming projects.
According to analyst Vitaly Umansky, ‘$4.2 billion of liquidity in the US and Macau (cash and available revolver) gives the company ample dry powder to continue ongoing planned investments (Macau, UAE) and potentially other projects’.
