Wynn Q1 Results Bolstered by US Casinos, Resumes Dividend

Posted on: May 9, 2023, 04:32h. 

Last updated on: May 10, 2023, 11:16h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

The investment community usually views Wynn Resorts (NASDAQ: WYNN) as a Macau story. But it was the operator’s domestic casino resorts that supported its first-quarter results.

Wynn Q1
Wynn and Encore Las Vegas. Those venues contributed to solid Q1 results for the operator and supported the resumption of dividends. (Image: Vegas Means Business)

For the first three months of 2023, Wynn notched a loss of 2 cents a share on revenue of $1.42 billion. Analysts expected a profit of 3 cents per share on sales of $1.37 billion. Adjusted property earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) surged 142% to $429.7 million from $177.6 million a year earlier.

In the US, Wynn Las Vegas and Encore Boston Harbor are firing on all cylinders, generating a new all-time record for Adjusted Property EBITDAR at our combined North American properties during the quarter,” said CEO Craig Billings in a statement.

Wynn’s Las Vegas properties, the operator’s namesake venue and Encore, generated first-quarter operating revenue of $145.6 million, while Encore Boston Harbor contributed $25.5 million. Wynn Palace and Wynn Macau combined for $301.6 million in operating sales during the January through March period.

Wynn Surprises with Dividend Resumption

Like so many of its competitors, particularly those with heavy Macau footprints, Wynn suspended its dividend during the early stages of the coronavirus pandemic in 2020.

Since then, the resumption of the quarterly payout has been a murky prospect, owing to agreements with creditors and speculation regarding the veracity of the Macau recovery. Fortunately for investors, Macau is rebounding in better-than-expected fashion, providing leeway for Wynn to restart its dividend.

The Las Vegas-based company said it will resume its quarterly dividend at 25 cents a share on June 6, payable to investors of record as of May 25. Wynn concluded the first quarter with $3.84 billion in cash, $837 million in borrowing capacity, and long-term debt of $12.25 billion.

The reinstatement of our dividend program reflects the strength of our financial results, our robust liquidity position, and our commitment to returning capital to shareholders,” according to the statement.

With Wynn reinstating its dividend, only Caesars Entertainment (NASDAQ: CZR) and Las Vegas Sands (NYSE: LVS) of the big four US-based gaming companies don’t have a quarterly payout. MGM Resorts International (NYSE: MGM) pays a scant penny per share per year.

Wynn Bullish on Macau

Macau remains the major contributor to Wynn’s top and bottom lines, and while that was a negative for much of the past three years, it’s now a positive.

“In Macau, after several challenging years, we were pleased to experience a meaningful return of visitation and demand, particularly in our mass gaming and retail businesses,” added Billings. “We believe we are well-positioned for success in Macau’s next phase of growth.”

Data indicate Wynn is gaining market share in the special administrative region and proving adept at luring more mass and premium mass customers. In the first quarter, table game win percentage from mass-market clients at Wynn Palace was 22.1%, up from 20.9% a year earlier.

Adjusted property EBITDAR at Wynn Macau surged to $44.7 million following a loss of $4.7 million in the first quarter of 2022.