Chief Executive Matt Maddox said the group had overseen a ‘controlled and organized’ 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.”
Morningstar Inc’s equity analyst Chelsey Tam believes that the financial quarter ending April 30 would lose up to 80% of its GGR with a recovery of 15% in subsequent months before ‘getting back to normal in 2021.’
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.”
Source: GMB / G3 Newswire
