Wynn Macau Ltd has reported a 5.2-percent improvement in net profit for the second quarter, from US$160.3 million in the corresponding period last year to US$168.6 million for the three-months ended June 30.
In results released to the Hong Kong Stock Exchange before the trading day commenced on Wednesday, the Macau casino operator said revenue had improved to US$1.18 billion up from US$1.16 billion at the same stage last year.
The Macau operator of two resorts – Wynn Macau (pictured in a file photo) in the downtown Peninsula district and the Wynn Palace casino resort on Cotai – said adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased by US$2.9 million at the Wynn Macau property and fell US$12.1 million at Wynn Palace.
Adjusted EBITDA from Wynn Palace was US$167.2 million for the second quarter, a 6.8-percent decrease from US$179.3 million in the same period last year. At the Wynn Macau casino-hotel, adjusted second-quarter EBITDA was US$175.9 million for the second quarter, a 1.7-percent increase year-on-year from US$172.9 million.
The most significant change in the company’s operations was a decline in revenue from the VIP gaming segment at the older property downtown. VIP turnover at Wynn Macau for the three-months to June 30 fell from US$13.93 billion to US$9.28 billion in year-on-year terms – a 33.4-percent decline.
Overall, Wynn Macau Ltd saw its VIP turnover on table games decline from US27.96 billion to US$22.66 billion in year-on-year terms, a slump of about 18.9 percent.
In a note following Wynn Macau Ltd’s second-quarter results announcement, brokerage Jefferies Hong Kong Ltd said the casino operator’s performance was “in line” with expectations. Analysts Andrew Lee and Lois Zhou highlighted as “key negatives” for the period the lower margins recorded at Wynn Palace, “with management noting low direct-VIP hold, premium mass weakness but strong core mass.”
Brokerage JP Morgan Securities (Asia Pacific) Ltd labelled Wynn Macau Ltd’s second quarter results as “disappointing” and “soft”. Analysts DS Kim, Jeremy An and Christine Wang wrote in a note: “Overall, we come away from Wynn Macau Ltd’s second quarter report incrementally disappointed, and believe the stock could be under pressure for now amidst potential estimate downgrades by the Street.”
Wynn Macau Ltd’s parent company Wynn Resorts Ltd announced its second quarter results in the United States on Tuesday after the close of the markets. The parent reports according to the GAAP (generally accepted accounting principles) standards, while Wynn Macau uses the International Financial Reporting Standards, or IFRS.
“We were pleased to deliver year-over-year revenue growth at all of our properties in the second quarter, with particular strength in our core mass business in Macau,” said Wynn Resorts chief executive Matt Maddox. “On the development front, we have made meaningful progress designing and planning the Crystal Pavilion in Macau, which we believe will be a ‘must-see’ tourism destination on Cotai.”
Wynn Resorts announced last month details of its plan to expand the Wynn Palace casino resort in Cotai. The glass-and-steel extension, the Crystal Pavilion, and a new 650-room hotel tower are costed at US$2 billion. Construction on the site within the grounds of Wynn Palace is scheduled to begin late in 2021.
According to Mr Maddox, no gaming facilities will be included at the new extension; however an art museum, theatre and “destination food hall” are planned.
Wynn Palace opened in August 2016 and had an initial cost of US$4.2 billion.
Wynn Resorts Ltd reported a net profit of US$94.6 million for the second quarter, compared to US$155.8 million in the second quarter of last year. It said the change was primarily due to an increase in pre-opening expenses related to the development of Encore Boston Harbor.
Wynn Resorts said it would pay a dividend of US$1.00 a share on August 27 to stockholders of record as of August 16.
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