WYNN MACAU(01128)2024-03-21 13:54Financial Performance - For the year ended December 31, 2023, the total revenue reached HKD 24,268,142,000, a significant increase from HKD 5,643,940,000 in 2022, representing a growth of approximately 329%[6] - Adjusted EBITDA for the year was HKD 6,621,025,000, compared to a loss of HKD 1,948,480,000 in the previous year, indicating a substantial recovery[6] - The net profit attributable to owners was HKD 1,171,656,000, a turnaround from a loss of HKD 7,339,270,000 in 2022[6] - Basic earnings per share improved to HKD 0.22 from a loss of HKD 1.41 in the previous year[6] - Total operating revenue for Wynn Palace and Wynn Macau reached HKD 24,268,142, an increase of 329% from HKD 5,643,940 in 2022[54] - Adjusted EBITDA for Wynn Palace was HKD 4,311,754 compared to a loss of HKD 872,587 in 2022, while Wynn Macau reported an adjusted EBITDA of HKD 2,309,271, up from a loss of HKD 1,075,893[56] - The company reported a net profit attributable to shareholders of HKD 1,171,656, a significant recovery from a net loss of HKD 7,339,270 in the previous year[56] - The company reported financing income of HKD 571,267, compared to HKD 81,511 in 2022, while financing costs increased to HKD 3,335,189 from HKD 2,563,024[56] - The company reported a significant increase in hotel room revenue, reaching HKD 1,579,610 for Wynn Palace in 2023, compared to HKD 313,667 in 2022[92] - Casino revenue increased from HKD 3.7 billion in 2022 to HKD 19.1 billion in 2023, accounting for 78.7% of total operating revenue[102] Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.075 per share for the year, compared to no dividend in 2022[7] - The board proposed a final dividend of HKD 0.075 per share for the year ended December 31, 2023, compared to zero in 2022, pending shareholder approval[32] Assets and Liabilities - Total non-current assets amounted to HKD 27,457,459,000, slightly down from HKD 27,774,438,000 in 2022[9] - Current assets increased significantly to HKD 17,371,594,000 from HKD 8,304,500,000 in 2022, reflecting improved liquidity[9] - The total liabilities decreased to HKD 49,694,872,000 from HKD 48,476,942,000, indicating a slight reduction in financial obligations[10] - The company reported cash and cash equivalents of HKD 10,300,159,000, up from HKD 7,422,901,000 in the previous year, enhancing its liquidity position[9] - As of December 31, 2023, the company's net debt was HKD 44,154.7 million, a slight decrease from HKD 44,822.2 million in 2022[123] - The capital debt ratio improved to 155.8% in 2023 from 162.0% in 2022, indicating a stronger capital structure[123] Taxation - The effective tax expense for the year ended December 31, 2023, was HKD 42,706,000, which is 3.5% of the pre-tax profit, compared to HKD 12,427,000 (0.2%) in 2022[23] - The group has not made provisions for Hong Kong profits tax for the year ended December 31, 2023, as there were no taxable profits from Hong Kong, consistent with 2022[21] - The group recorded unrecognized tax losses of HKD 4.44 billion as of December 31, 2023, down from HKD 6.56 billion in 2022, which is believed to offset any potential adjustments suggested by the Macau tax authorities[28] Financing and Debt - The total interest-bearing borrowings increased from HKD 48,228,497,000 in 2022 to HKD 52,679,614,000 in 2023[47] - The company entered into a revised credit agreement on June 27, 2023, transitioning the benchmark interest rate from LIBOR to SOFR with an adjustment spread of 0.10 basis points[135] - The total revolving credit facility available to WM Cayman II is HKD 11.7 billion, with an option to increase by an additional USD 1 billion (approximately HKD 7.82 billion) under certain conditions[134] - WML issued 585.9 million (approximately HKD 4.60 billion), which are intended for general corporate purposes[146] Operational Highlights - The company operates primarily in Macau, with its main business segments being the Wynn Palace and Wynn Macau[53] - The company is in the design phase for the next phase of Wynn Palace, which will include a theater and event space, as well as unique dining and non-gaming offerings[61] - The company employs approximately 11,300 staff in Macau, focusing on talent development and community engagement through various initiatives[60] - The company continues to emphasize sustainable development and community support through its Wynn Care program and charitable foundation[60] Market and Economic Conditions - The tourism industry significantly impacts WRM's business, with visitor numbers to Macau increasing by 394.9% in 2023 compared to 2022[81] - The company’s cash flow is primarily dependent on its Macau operations, which poses greater risks due to potential adverse events like COVID-19[175] - The ongoing recovery of the Macau gaming business to pre-pandemic levels remains uncertain, impacting the ability to pay dividends[177] - Negative macroeconomic conditions have led to significant increases in interest rates, reduced consumer discretionary spending, and volatility in capital markets, adversely affecting the company's gaming revenue, financial condition, operating performance, and cash flow[161] Regulatory and Compliance Risks - The company must comply with Macau laws and regulations, and failure to maintain necessary licenses and permits could severely impact its operations[162] - The company faces administrative reviews and approvals from multiple Macau government agencies, and failure to comply with gaming license terms may lead to the revocation of its gaming license[164] - Compliance with anti-money laundering laws and regulations is critical, as violations could adversely affect the company's business and financial performance[182] - The company is subject to strict regulations, and non-compliance could lead to increased operational costs and reduced profits[186] Cybersecurity and Operational Risks - Cybersecurity risks, including system failures and data breaches, pose significant threats to the company's operations and customer data security[188] - The company has implemented internal controls and compliance programs, but there is no guarantee that these measures will effectively prevent violations of policies and laws[184] - The company relies heavily on its computer systems for transaction processing and business management, and any significant disruption could have a major negative impact on business performance and financial status[194] Intellectual Property Risks - The company is licensed to use the "WYNN" trademark, and any challenge to this right could adversely affect business operations and financial performance[199] - The company faces risks if third parties successfully challenge its rights to the "WYNN" trademarks, which could adversely affect its business and operating performance[200]