The management of Wynn Macau Ltd aims to open its new casino-resort in Cotai, Wynn Palace (pictured), on March 25, 2016, company chairman Steve Wynn said during a conference call following the announcement of the second quarter results by parent Wynn Resorts Ltd.
Mr Wynn added that the Macau government had already approved the final batch of construction workers the company had requested for the site. He said construction and staffing were on schedule to meet the March 25 opening date.
Wynn Macau has previously described Wynn Palace as a US$4.1 billion casino resort project. The company invested US$431.4 million in the Cotai project during the second quarter, taking the total investment to US$2.7 billion through to the end of June.
Wynn Palace will include a 1,700-room hotel, a large lake with fountain display, meeting space, a casino, a spa, shops, and food and beverage outlets.
Wynn Macau profit down
Wynn Macau posted a year-on-year decrease of 62.5 percent in net profit for the second quarter, to US$73.6 million, using International Financial Reporting Standards (IFRS), the company announced on Wednesday.
The decline was caused by a 36.4 percent slump in casino operating revenue, to US$578.1 million, the Macau gaming firm said in a filing to the Hong Kong Stock Exchange. The company, which currently only operates one property – casino-hotel Wynn Macau on Macau peninsula – also recorded a decline of one third in operating revenue from its shops, its second most important business segment, to US$27.2 million.
According to the parent Wynn Resorts – which uses the U.S. standard known as Generally Accepted Accounting Principles for its report numbers rather than IFRS –, table games turnover in the VIP segment at Wynn Macau was US$15.5 billion for the second quarter of 2015, a 41.1 percent decrease from US$26.4 billion in the second quarter of 2014. The average number of VIP tables decreased to 247 units in the second quarter of 2015 from 263 units in the prior year’s second quarter, the announcement added.
Table drop in the mass-market segment at Wynn Macau was US$1.2 billion for the period, down 16.5 percent from the 2014 second quarter. Slot machine handle declined 29.5 percent to US$1.0 billion.
The average number of mass-market tables increased to 223 units from 192 units in the prior year’s second quarter. The average number of slot machines in the casino floor also went up, to 707 units from 624.
Net income at parent Wynn Resorts for the second quarter of 2015 was US$56.5 million, or US$0.56 per diluted share, compared to US$203.9 million, or US$2.00 per diluted share respectively, in the second quarter of 2014. The company said the decline was a result of the lacklustre results in its Macau operations, but also of softer performance in the United States, where Wynn Resorts owns and operates Wynn Las Vegas and Encore resort, in Las Vegas, Nevada.
Wynn Resorts also announced a cash dividend of US$0.50 per common share. This dividend will be payable on August 20 to stockholders of record on August 11.
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"The Hong Kong protests may hurt Macau gross gaming revenue by about mid-single-digit (i.e., half of maximum visitation exposure), which should fade away gradually as people will find alternative ways to visit Macau”
DS Kim, Jeremy An and Christine Wang
Analysts at brokerage JP Morgan Securities (Asia Pacific) Ltd