Analysts: Wynn Macau shifts focus to earnings growth over debt reduction

[Photo: Melissandre Denize]

Casino operator Wynn Macau Ltd is prioritizing cash-flow growth through major capital projects over debt repayment, according to a recent research note from CreditSights.

The recent note from the financial analysis firm follows the MSAR government’s formal approval granting Wynn Macau permission to proceed with a USD950 million expansion at its flagship Cotai resort, Wynn Palace.

Named “The Enclave at Wynn Palace,” the new project will feature a 432-room, all-suite hotel tower, an international spectacle theater, and an events center, raising the property’s guest room capacity by approximately 25% and suite supply by 50%.

“While this would likely put a strain on Wynn Macau’s leverage metrics, which still remain above pre-pandemic levels, we opine that deleveraging has become a lower priority for the company, as evidenced by its stagnant leverage levels over the past several quarters,” CreditSights analysts Nicholas Chen and David Bussey wrote in the Friday note.

“Management appears more focused on driving incremental EBITDA to support margin preservation/growth,” CreditSights said. The institution also stated that it expects financing for the development to be sourced initially from internal cash reserves or by drawing down on the company’s undrawn USD1.35 billion revolving credit facility.

CreditSights forecasts that Wynn Macau generated roughly $91 million in free cash flow during the first quarter of 2026 and predicts that overall free cash flow for the year will decline due to expanding capital outlays.

“For FY26, we project free cash flow to remain positive, albeit smaller year-on-year due to the higher expected capex outlay,” CreditSights said.

Official documents published in the MSAR Official Gazette (BO) confirm that Palo Real Development Company Limited, a subsidiary of Wynn Resorts (Macau) S.A., secured the revised 205,797-square-meter land concession covering the Cotai site.

Under the terms of the modified lease, which remain valid through May 1, 2037, Wynn agreed to pay a lump-sum land premium of MOP652.3 million ($80.8 million) alongside an annual rent of approximately MOP9.5 million.

The MSAR government emphasized that the project supports Macau’s mandate to diversify its economy through non-gaming tourism, while leaving the Cotai resort’s existing 43,519-square-meter gaming floor strictly unchanged.

As reported by the Times, the revised contract stipulates a total development timeline of 60 months from its publication date – July 16. Construction work is expected to commence within the year, with expenditure initially limited to piling and early development before accelerating after 2026.