Wynn Resorts looks for Macau rebound in 2020 after quarterly revenue slips 3.7 per cent

Wynn Resorts, which has a 72 per cent stake in Hong Kong-listed Wynn Macau, reported operating revenues softened to US$1.65 billion for the first quarter of 2019, a decrease of 3.7 per cent, or US$64.0 million, from US$1.72 billion for the first quarter of 2018.

Wynn has two Macau properties, Wynn Macau in the Macau peninsula and Wynn Cotai in the Cotai strip. Operating revenues increased US$60.8 million at Wynn Palace and decreased US$94.4 million at Wynn Macau.

Wynn’s Las Vegas operations saw a drop of US$30.5 million in the first quarter. Wynn Macau’s first quarter adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) declined 8.4 per cent to US$386 million, which was in line with analysts’ expectations. Wynn Palace’s Ebitda grew 5 per cent to US$223 million.

Wynn Macau was one of the first foreign owned casino properties to debut in Macau, opening kitty-corner to the Grand Lisboa in 2006.

During a conference call on Friday, Wynn Resorts executives noted that the Encore Tower of Wynn Macau was undergoing renovations that would gear it towards the premium mass market. The property is expected to be ready by the end of this year.

“Wynn Macau is really all about 2020,” said Matthew Maddox, chief executive of Wynn Resorts. “2020 will be the year to judge Wynn Macau.”

Casino revenues at Wynn Macau totalled US$450.2 million for the first quarter, a 16.5 per cent decrease from US$539 million a year earlier. Wynn’s Hong Kong-listed shares ended little changed on Friday, slipping 0.1 per cent, or 2 HK cents, to close at HK$19.68 following the overnight announcement on quarterly operations.

Management highlighted “choppy” conditions in the premium mass market and uncertainties around the VIP market, while pointing to 13 per cent growth in the core mass segment.

Casino revenues from Wynn Palace, which opened in 2016, were US$623.2 million for the first quarter, a 9.6 per cent increase from US$568.5 million a year earlier.

Casino revenues from Wynn Macau were US$450.2 million for the first quarter, a 16.5 per cent decrease from $539 million a year earlier.

Wynn Macau had about 13 per cent of Macau’s mass gambling market, placing the company fifth of six operators in that segment, according to Sanford Bernstein.

The casino group said a new project in Boston, estimated to cost US$2.6 billion, will open in mid 2019.

Jefferies Equity Research maintains a buy rating on Wynn Macau.