MGM Resorts, Wynn Macau flags coronavirus concerns

Monday 2nd of March 2020

MGM Resorts and Wynn Macau have identified the coronavirus outbreak as a risk to its businesses but said they are not able to quantify the full extent of its impact on results at this stage.

In MGM Resorts’ annual report, filed on Thursday, the company said it is unable to predict the full extent of the impact of the coronavirus on the company’s results, but said it expects a material effect on MGM China’s results in the first quarter of 2020, and potentially thereafter.

“The extent to which the coronavirus impacts the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted,” said MGM.

During Macau’s casino shutdown, MGM lost around $1.5 million of operating expenses per day across both of its properties in Macau - most of this being payroll related.

While MGM resumed operations on February 20, MGM said there are limits on the number of gaming tables allowed to operate and limits on the number of gaming tables allowed to operate.

As well as this, China’s temporary suspension of its visa scheme that permits mainland Chinese to travel to Macau remains in place.

Wynn Macau noted that visitation to Macau has fallen precipitously since the outbreak of the coronavirus, caused by the Chinese government’s suspension of its visa and group tour schemes that allow mainland Chinese residents to travel to Macau.

However, Wynn Macau was also unable to reasonably estimate the impact of the viral outbreak on its results.

“The Coronavirus outbreak has had and will have an adverse effect on our results of operations.

Given the uncertainty around the extent and timing of the potential future spread or mitigation of the Coronavirus and around the imposition or relaxation of protective measures, we cannot reasonably estimate the impact on our future results of operations, cash flows, or financial condition.”

MGM added that there is also a chance that the virus impacts its properties in the United States.