Wynn Resorts Is Losing Up To $2.6 Million Each Day Due To Unfortunate Coronavirus Shutdown

Date: Mon, 10 February 2020

Author: Sergei Klebnikov

Source: forbes.com

 

 

Top line: Wynn Resorts, operating high-end hotels and casinos globally, reported that it was facing losses to up to $2.6 million daily due to shutdowns in Macau because of the outbreak of the coronavirus.

 

• Their business in China suffered a major hitby the viral coronavirus infecting more than 31,000 and killing 636 people. Chinese officials in Macau has asked all casino operators to shut operations.

 

• On top of the 40 other casino propertiesin Macau, Wynn Macau and Wynn Palace temporarily closed at midnight on Wednesday, though a few hotel rooms and restaurants are still open for the several of the remaining guests.

 

• A usual peak season for the luxurious ca

 

• sinos in Macau, the closure of these casinos during this time is causing Wynn Resorts a loss of $2.4million to $2.6million per day, reported by CEO Matt Maddox

 

• The expenses is mainly contributed by the payrollof its 12,200 employees who work in Macau. The company comprises of over 31,000 employees in total.

 

• The Wynn Resorts CEO reemphasizedthe company’s target on the health and safety of its employees: “I’d like to commend the government of Macau and China for the decisive action they continue to take to contain the coronavirus,” Maddox mentioned during the company’s earnings call. “We’re in daily conversations with the government, and they’ve been terrific partners.”

 

• Although $2.6 million per dayappears to be a huge financial loss, Wynn executives are certain that they can recuperate the losses: “I don’t want to predict when operations will be back to normal, but they will be,” Maddox reported.

 

Crucial statistics: The news caused Wynn Resorts stock to dip about 4% on Friday. Shares are down just over 10% so far in 2020. 

 

Crucial quote: “Macau is set up for a really great rebound. Tourism is one of the first things that rebound with events like this because people want to get out and move around. We feel good about the long-term aspect of Macau once the virus is completely contained.”

 

What to watch for: How extensive of an impact the Macau closures potentially places on Wynn’s first-quarter earnings in 2020. Wynn Resorts’ executives are very certain that they are in good financial health to battle losses from the coronavirus. “We have a ton of liquidity,” said chief financial officer Craig Billings. “We have a couple billion dollars of availability between cash and revolver in Macau. That’s more than sufficient to last for, really, any period of closure.”

 

 

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