Gaming | Wynn posts turnaround in Q4 2020, committed to expanding premium mass market

Wynn Macau Ltd posted a turnaround in the fourth quarter (Q4) of 2020, with its adjusted property earnings before interest, taxation, depreciation and amortization (EBITDA) of USD39.4 million finally returning to positive values, according to the latest quarterly report published by the conglomerate.
The EBITDA for Q4 2020 represented a sharp pick-up following the negative EBITDA of $112.1 million reported in the preceding quarter.
In Q4 2020, Wynn Palace in Cotai was the most lucrative property for Wynn Macau, posting a positive EBITDA of $28.7 million, up US$106.3 million from the negative EBITDA of $77.6 million in the third quarter (Q3) of 2020. Despite the advancement, it was still a far cry from the positive US$177.6 million reported in Q4 2019, which was predominantly hampered by Covid-19.
In terms of gaming revenue, Wynn Palace’s VIP table games win as a percentage of turnover was at 1.97% in Q4 2020 — below the group’s early projections of 2.7%-3.0%. Meanwhile, the table games win percentage in mass market was 21.6%, compared to 25.2% in Q4 2019.
Wynn Macau, located in Macau Peninsula, was also back on a positive path. Its EBITDA made a u-turn from an EBITDA loss of $34.5 million in Q3 2020 to $10.7 million gains in EBITDA in Q4 2020. The property’s VIP table games win as a percentage of turnover was 3.10%, higher than the group’s previous estimates of 2.7%-3.0%. The table games win percentage in mass market was 17.9%, compared to 20.3% in Q4 2019.
In the report, Matt Maddox, CEO of Wynn Resorts, Limited, the parent company of Wynn Macau, attributed the rebound to “the gradual and thoughtful easing of visitation restrictions.”
“[It’s] crystal clear that the growth drivers for Macau are really the sweet spot of our company, and that’s the premium segment, premium mass in particular. So we’ve spent a lot of time reconfiguring our properties over the last six months to cater to that customer,” Maddox said on an earnings call with analystsregarding the Q4 report on February 4.
The tactics used to tilt Macau’s properties towards premium mass customers include turning restaurants and buffets into hotpot restaurants, and transforming some large villas, which were previously used for the junket business, into entertainment facilities, he added.
“That [premium] customer is going to lead Macau back and we are well-positioned to take a disproportionate share of that business,” Maddox said.
According to the report, the Macau operation of Wynn Resorts was the most gainful. Its combined EBITDA gains of US$39.4 million exceeded the $21 million and $16.7 million generated by the group’s Las Vegas and Encore Boston Harbor operations, respectively.
Regarding operating income, Wynn Macau reported a loss of $74.3 million in Q4 2020, displaying a significant improvement from the $216 million loss reported in Q3 2020.