Wynn Macau’s Q3 Slightly Beats, Restarting of E-Visa Travel Drives a Better 2023

Wynn Macau’s third-quarter results were better than our expectations, with the adjusted EBITDA loss improving to USD 66 million from negative USD 90 million a quarter ago. We think this reflects a low base in the prior quarter, which was dampened by sharply lower win rates. In addition, a more aggressive cost-cutting effort and a USD 7 million bad debt credit also helped to improve its third-quarter adjusted EBITDA. The results, however, continued to reflect COVID-19 headwinds, as Macao gaming demand was hit by a two-week shutdown in July, which dampened industry gross gaming revenue, or GGR, to just 7.8% of the 2019 level. We expect industry GGR to improve from the worst of times in the coming quarters, following the resumption of e-visa travel to Macao from Nov.1, which we think is a significant step toward a durable recovery of Macao gaming demand.