U.S.-based Wynn Resorts Ltd on Thursday stopped short of giving a firm date for when in the third quarter it would open its under-construction Wynn Palace casino resort (pictured) in Macau’s Cotai district.
Wynn Resorts is the parent company of Macau-based casino operator Wynn Macau Ltd.
“We expect to open Wynn Palace in the third quarter of 2016,” Wynn Resorts stated in its results announcement for the first quarter of 2016.
In a subsequent conference call with analysts, the firm’s management did not provide a clear date for the opening; but Steve Wynn, chairman and chief executive of Wynn Macau and Wynn Resorts hinted on a potential July opening.
Mr Wynn had said in April that the Wynn Palace casino resort was likely to open in August.
The property previously had been scheduled to open on June 25, after a plan to launch it on March 25 was dropped.
“We believe a late July/early August opening is reasonable at this juncture,” Deutsche Bank Securities Inc’s analysts Carlo Santarelli and Danny Valoy wrote in a note following the conference call.
According to Wynn Resorts, Wynn Palace will include a 1,700-room hotel with a lake in front of the main entrance, plus meeting, retail, food and beverage, and casino space. The total project budget, including land costs and financing fees, is approximately US$4.2 billion, according to the latest estimate.
During the first quarter of 2016, Wynn Macau invested approximately US$177.5 million in Wynn Palace, according to the parent company, taking the total investment to US$3.7 billion.
The opening of Wynn Palace is considered by several investment analysts to be a major milestone for Wynn Macau and parent Wynn Resorts. The group currently only has one property in operation in Macau – the Wynn Macau casino hotel.
“We are particularly focused on the strong expectations for the [Wynn] Palace and resulting earnings growth and cash flow inflection,” Telsey Advisory Group LLC analysts David Katz and Brian Davis said in a note published after the Wynn Resorts announcement.
Macau profit down 27 pct
Hong Kong-listed Wynn Macau reported net profit of US$81.9 million in the first quarter of 2016, a decline of 26.6 percent in year-on-year terms, according to the firm’s parent Thursday filing.
In the first three months of 2016, net revenues were US$608.2 million, a 13.8 percent decrease compared to the prior-year period.
Wynn Resorts had already provided the market with “preliminary expectations” of its financial results for the first quarter of 2016 in April.
According to Wynn Resorts’ Thursday release, Wynn Macau reported adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$191.2 million in the first quarter of 2016, down 9.9 percent from US$212.3 million in the first quarter of 2015.
Table games turnover in the VIP segment was US$13.47 billion for the first quarter of 2016, a 21.4 percent decrease in year-on-year terms. VIP table games win as a percentage of turnover (calculated before commissions) for the quarter was 2.81 percent.
Wynn Macau’s average number of VIP tables decreased to 189 units in the first three months of 2016 from 252 units in the year-earlier period.
Table drop in the mass-market segment at Wynn Macau was US$1.21 billion in the first quarter of 2016, down 5.6 percent year-on-year. Table games win in the mass-market segment decreased by 11.5 percent to US$247.5 million in the first quarter of 2016.
Slot machine handle for the first quarter of 2016 increased 5.5 percent from the 2015 period to US$1.10 billion, and slot win increased by 5.6 percent to US$50.4 million.
In the initial three months of 2016, total non-casino revenues, before promotional allowances, decreased 13.2 percent to US$76.7 million.
Group wide, parent Wynn Resorts announced net revenues for the first quarter of 2016 were US$997.7 million, compared to US$1.09 billion in the first quarter of 2015. Net income for the period was US$75.2 million, or US$0.74 per diluted share, compared to a net loss of US$44.6 million, or US$0.44 per diluted share, in the first quarter of 2015.
During the post-result announcement conference call with analysts, Wynn Macau’s executive director Ian Coughlan said the company had recorded a positive performance in April and a strong Labour Day holiday period. “We are seeing some signs that the worst is over,” he added.
“Wynn Macau is our top Hong Kong-listed name heading in to the opening of Wynn Palace as we believe the company should generate growth well in excess of current consensus expectations,” stated Union Gaming Securities Asia Ltd in a note following the results announcement.
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Analyst at Roth Capital Partners