Hong Kong company reporting season

Wynn Macau shares dive despite a 148 per cent jump in third-quarter profit

  • The company generates about 70 per cent of revenue for parent Wynn Resorts in Las Vegas
PUBLISHED : Thursday, 08 November, 2018, 12:53pm
UPDATED : Wednesday, 16 January, 2019, 12:06pm

Shares of Wynn Macau, chaired by Hong Kong-based entertainment tycoon Allan Zeman, dived on Thursday even though the company posted a 148 per cent jump in third quarter profit from a year earlier.

Net profit for the Macau unit of Wynn Resorts in Las Vegas, reached US$223.5 million.

The company, which operates Wynn Macau and Wynn Palace, delivered US$1.31 billion in operating revenues for the three months through September, compared with US$1.09 billion in the same period in 2017. The increase was boosted by a 40 per cent jump in revenue at Wynn Palace.

Wynn Palace’s VIP turnover increased 13.4 per cent during the quarter, while that for Wynn Macau climbed 4.4 per cent.

Operating revenue growth at the two resorts helped offset a decrease of US$65.4 million from the parent company’s Las Vegas operations.

The two resorts in Macau have a total of 2, 714 guest rooms, suites and villas, as well as 697,000 square feet of casino space offering 24-hour gaming service.

On Wednesday, Wynn Resorts – which derives about 70 per cent of its revenues from the Macau unit – reported a net profit of US$156.1 million for the third quarter, up 95.6 per cent year on year, and operating revenues of US$1.71 billion, up 10.2 per cent from last year.

But Wynn Macau’s improved earnings failed to arrest the decline of its Hong Kong-traded stocks, no thanks to the uncertainties surrounding the US-China trade war and the mainland’s crackdown on corruption.

The stock opened sharply lower on Thursday and fell 9.7 per cent to close at HK$17.06.

The benchmark Hang Seng Index increased 0.3 per cent to finish at 26,227.72 on Thursday.

Gross gaming revenue in Macau dropped by 17.3 per cent from the previous month to a one-year low of 21.95 billion patacas (US$2.72 billion) in September, according to data from the city’s casino regulator, the Gaming Inspection and Coordination Bureau. Citigroup forecasts October gaming revenue to rebound to 28 billion patacas.