Notícies de l'operador
China – Macau’s operators fear closures could last for longer than 15 days
By Phil - 7 de febrer de 2020
The 15-day closure of Macau casinos to combat the spread of the deadly Coronavirus could wipe off 50 to 80 per cent in revenue over the next two or three months, according to analysts although pent-up demand could see gamblers swarm the world’s most profitable casino destination in the second half of the year.
Wynn Resorts has pitched its losses at between US$2.4m to US$2.6m a day for every day its Macau casinos are closed
Chief Executive Matt Maddox said the group had overseen a ‘controlled and organised’ closure of its casinos.
“We do still have our hotel and a couple of restaurants open for the few remaining guests that are in Macau. But during this time that the casino is closed, our operating expense burn rate is roughly US$2.4m to US$2.6m a day. And that’s largely comprised of payroll to our 12,200 employees.’
He added that staff would continue to be paid their wages of ‘roughly US$1.8m to US$1.9m a day.’
“Now is the time you invest in your people, you don’t do something short-term that would hurt the culture and cause any distraction. We know that this is going to be temporary and we think that it is the right long-term investment,” he added, saying it was ‘a little early’ to say when the casinos would reopen. “They will be eventually, we are not exactly sure when,” he said. “The team on the ground is working with the government on a daily basis and watching very carefully if there will be any continued outbreak of the virus,” he added. “We do feel good about the long-term aspect of Macau as soon as the virus is completely contained.”
Wynn Resorts President and CFO Craig Billings added: “Business interruption insurance must relate to a physical event that caused the business interruption. That obviously is not the case here; so we do not expect material business interruption coverage proceeds from the coronavirus event. The US facility has more than ample covenant headroom to sustain a very prolonged period of suppressed business volumes in Macau and the Macau facility does have a maintenance covenant that is sensitive to Macau EBITDA. We already have a game plan in place to manage that [covenants of the Macau bank facility] to the extent that the shutdown is extended – but it would have to be quite extended. We have a ton of liquidity, we have a couple of billion [U.S.] dollars between cash and revolver in Macau, and that’s sufficient to last for really any period of closure.”
Morningstar Inc’s equity analyst Chelsey Tam believes that the financial quarter ending April 30 would lose up to 80 per cent of its GGR with a recovery of 15 per cent in subsequent months before ‘getting back to normal in 2021.’
“People will want to get out of their homes after nesting for months,” said Tam. “We think this is a good opportunity for long-term investors to go bargain hunting in the Macau gaming coverage.”
Las Vegas Sands’s Chief Operating Officer Robert Goldstein agreed saying: “I’m a big believer in pent-up demand. When it does resolve, Macau is going to be very, very, very busy because, whether you know it or not, these folks like to gamble.”
he warned though that the closure could be as long as two months. Mr Goldstein added: “He [Macau’s Chief Executive] has made it clear that he will not be able to make a decision until he gets further understanding of the virus and its severity in Asia.”
The Macau government confirmed the closure of its casinos following confirmation that a hotel employee had become infected by the coronavirus, taking the number of recorded cases in the city to ten.
Macau’s Chief Executive Ho Iat Seng said: “Of course this was a difficult decision, but we must do it for the health of Macau’s residents. Macau can still bear these economic losses.”
Sanford Bernstein said: “A second-half recovery is contingent on the contagion being brought under control and travel into Macau resuming and China’s economy not faltering materially and reducing customer confidence. The latter would likely be abated by strong government stimulus if the economy were to falter.”
Bernstein analyst Vitaly Umansky added: “If this is over in two months and forgotten in six, it won’t be a problem. If it continues until summer and there’s no end in sight, that’s a problem.”
