Casino operator Wynn Macau paints dire picture after first-half loss widens by two-thirds to US$459 million
- The company’s net loss increased to HK$3.6 billion (US$459 million) for the six months ending on June 30 from HK$2.2 billion a year earlier
- Given the uncertainties around Covid-19, firm ‘cannot predict’ future closures and ‘cannot reasonably’ estimate the impact on future results, it says in filing
The company’s net loss increased to HK$3.6 billion (US$459 million) for the six months ending on June 30 from HK$2.2 billion a year earlier, according to an exchange filing on Thursday. No interim dividend was declared, the same as last year.
“The Covid-19 pandemic has had and will likely continue to have an adverse effect on our business, operations, financial condition and operating results, and the ability of our subsidiaries to pay dividends and distributions,” the company said in its filing.
“Given the uncertainty around the extent and timing of the potential future spread or mitigation of Covid-19, and around the imposition or relaxation of containment measures, management cannot predict whether future closures, in full or in part, will occur in our properties, and cannot reasonably estimate the impact to the group’s future results of operations, cash flows or financial conditions,” it added.
Although there have been periods during which certain restrictions and conditions were eased by the Macau government to allow for more tourism and quarantine-free travel, adverse conditions created by and in response to the pandemic might cause these restrictions to be reintroduced.
For example, in response to an outbreak in Macau in mid-June this year, the Macau government extended its Covid-19 containment measures, including the closure of casino operations as well as all non-essential business, on July 11. It also closed and limited opening hours and operational capacity.
Meanwhile, Wynn Macau’s expiring gaming concession was extended from June 26 until December 31. Under the Concession Extension Agreement, the company paid the Macau government 47 million patacas (US$5.8 million) for the extension.
The gaming industry also faces new requirements. In June, the Macau government published amendments to the Macau gaming law approved by the Macau Legislative Assembly. These amendments include the awarding of up to six gaming concessions for up to 10 years with a maximum three-year extension possible, and an increase in the minimum capital requirement to 5 billion patacas.
“It is possible the Macau government could further change or interpret the associated gaming laws in a manner that could negatively impact the group,” Wynn Macau said in the filing.
Wynn Macau declined by 0.6 per cent to HK$4.83 at the close on Friday, taking its loss for the year to 25.81 per cent.