Hong Kong company reporting season

Wynn Macau posts HK$1.6bn interim profit as city’s gaming revenue rebounds

PUBLISHED : Thursday, 17 August, 2017, 9:47pm
UPDATED : Friday, 18 August, 2017, 6:52pm

Wynn Macau, a subsidiary of Wynn Resorts in Las Vegas controlled by gaming mogul Steve Wynn, saw its net profit reach HK$1.6 billion for the first half of 2017, compared to HK$1.1 billion a year ago, boosted by stronger casino revenues from mainland Chinese tourists.

With the ongoing anti-graft campaign of Chinese president Xi Jinping, as well as China’s tightening reins on capital outflows, casino operators in Macau experienced hard times from early 2015 to mid 2016, amid dropping mainland tourist numbers.

Things started to look up in the second half of 2016, with gambling revenues in Macau reaching 23 billion patacas (US$2.86 billion) in July that year, the highest since February 2014, according to Macau’s Gaming Inspection and Coordination Bureau.

“In the third quarter of 2016, both metrics began to improve, we have benefited from the rise in visitation to Macau during the first half of 2017,” Wynn Macau said in a statement.

There were 15.6 million tourist arrivals in the former Portuguese colony in the first half of this year, a 5.4 per cent rise over a year ago, according to the company.

Access headaches at new Palace casino leave hefty dent in Wynn Macau’s quarterly earnings

Among the visitors, approximately 90 per cent were from mainland China, Hong Kong and Taiwan.

Wynn Macau proposed an interim dividend for the period of HK$0.21 per share.

The company, which operates the resorts Wynn Macau and Wynn Palace, delivered HK$16.8 billion in net revenues in the first half, compared to HK$9.7 billion in the same period of 2016, mainly boosted by rising casino revenues that were up 70 per cent to HK$15.60 billion compared to a year ago.

Boasting 2,714 guest rooms and suites, as well as 701,000 square feet of casino space offering 24-hour gaming service, the resorts also benefited from higher VIP table turnover.

However, analysts said the VIP business is volatile because it is exposed to various risks, including the anti graft campaign.

“The overall effect of the (anti-graft) campaign and monetary transfer restrictions may negatively affect our revenues and results of operations,” the company said.

As such, the company won’t see much of a boost to its profit unless the mass market business expands further in the second half, according to analysts.

Sands China, another major casino resort operator in Macau, saw its net profit increase 23 per cent to US$678 million for the first half of 2017 thanks to the opening of its Parisian Macau property in

September last year, as well as the recovery of the Macau gaming market, according to the company.