Pandemic results in another quarterly loss for Wynn Resorts

Wynn Resorts Ltd., continuing its struggle with the pandemic on two continents, reported large net losses for the fourth quarter and for 2020.

Wynn President and CEO Matt Maddox on Thursday acknowledged the weak financial performance, but said improvements are coming as soon as this weekend when Wynn Las Vegas and Encore expect 50 percent hotel occupancy — the best since October — for Super Bowl weekend.

Wynn reported that the company, operator of Wynn Las Vegas and Encore on the Strip, had a net loss of $269.5 million, $2.53 a share, on revenue of $686 million for the quarter that ended Dec. 31. It had a net loss of $72.9 million, 62 cents a share, on revenue of $1.653 billion in the same quarter a year earlier.

For 2020, the company reported a staggering net loss of $2.327 billion, $19.37 a share, on revenue of $2.096 billion. In 2019, Wynn reported net income of $123 million, $2.61 a share, on revenue of $6.611 billion.

“We are encouraged by the progress we have made at each of our properties over the past several months, as we continue along the road to recovery from the pandemic,” Maddox said.

Bright spot

Evidence of that recovery is expected over this weekend when guests arrive for Super Bowl on Sunday. Maddox said it will be the highest hotel occupancy since October.

State regulations restrict the number of guests on the casino floor at 25 percent of fire code capacity, but there’s no such restriction in the hotel.

Analysts say Wynn’s fourth-quarter occupancy in Las Vegas averaged 34.2 percent compared with 89.4 percent in the fourth quarter of 2019. The average daily room rate for the quarter was $305 a night compared with $322 a night in 2019.

The casino restrictions have taken a big bite out of revenue with gross slot revenue down $46.9 million from $63.1 million a year ago, but gross table revenue at $72.3 million compared with $71.9 million a year earlier.

Maddox said his company’s casino marketing team has drawn new visitors and increased market share in Las Vegas.

Having restaurants available to hotel guests will be important to keeping customers happy when they arrive for their stays, Maddox said. The company is continuing to work with the state toward a return to providing a safe environment for trade shows and conferences, he said.

The statewide shutdown of the resort in March came within weeks of the opening of the company’s new two-story, 430,000-square-foot meeting space.

Restrictions at Encore Boston Harbor have been more severe than in Las Vegas with the hotel closed and a nightly curfew of 9 p.m. imposed on the casino floor.

Maddox said he’s encouraged that new table games at Encore Boston Harbor could eventually deliver more casino customers with craps play on the horizon.

Maddox said in Macao, the “gradual and thoughtful easing of visitation restrictions” allowed the company to return to adjusted cash flow profitability in the fourth quarter, with particular strength in premium mass business.

New virus outbreaks in China are expected to curtail visitation in Macao, where Wynn operates three resorts. The Year of the Ox begins Feb. 15.

“In the U.S., our operations at both Wynn Las Vegas and Encore Boston Harbor were resilient as we continue to deliver our industry-leading service, while remaining focused on costs,” he said.

WynnBet rollouts

Domestically, the company’s new sports wagering system, WynnBet, had successful rollouts in Michigan and Colorado recently and also is operating in New Jersey. Maddox said WynnBet will launch in additional states in coming months and the product will become better with each new version.

“We believe our product will be increasingly compelling with each release over the coming months and look forward to growing the business in 2021,” he said.

Gaming industry analysts had expected Wynn’s fourth-quarter results to be impacted by the coronavirus pandemic.

A consensus of analysts surveyed by Zacks Equity Research on Tuesday reported that capacity restrictions in Nevada, Massachusetts and Macao are affecting the company’s casino operations.

“Dismal visitation due to the pandemic and limited numbers of tables might have weighed on the company’s performance in the quarter to be reported,” the report said. “Dismal performance at Encore Boston Harbor, Wynn Palace, Wynn Macao, Las Vegas operations and Encore Boston Harbor is likely to get reflected in the fourth-quarter results. Moreover, cash burn on account of the coronavirus might have affected the to-be-reported quarter’s performance.”

But analysts also said sports wagering demand could help the company in the future.

“Wynn Resorts has been strengthening its position in the online sports betting category with current availability in New Jersey and Colorado, and secured market access in Indiana, Iowa, Nevada and Massachusetts,” the report said. “With increase in demand for the iGaming industry, the company has been making every effort to expand presence across more than a dozen other large jurisdictions.”

Wynn Resorts shares, traded on the Nasdaq exchange, closed up 27 cents, 0.25 percent, in below-average volume Thursday. After hours, the stock dipped 69 cents, 0.6 percent, to end at $108 a share.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.