By Maria Armental
Wynn Resorts Ltd.'s fourth-quarter profit fell sharply as the
casino operator reported steep declines at its operations in Macau,
China's semiautonomous gambling hub.
A corruption crackdown, tighter regulations and a weakening
economy on the mainland have cut into business in Macau, the only
place in China where casinos are legal. Chinese government
officials have said they plan to expand a smoking ban that went
into effect in October, prohibiting smoking anywhere in a casino,
including VIP rooms.
Since June, when Macau reported the first year-over-year monthly
decline in overall gambling revenue since 2009, gross revenue has
declined every month, ending the year down 2.6% from 2013. In
January, gambling revenue shrank another 17% to 23.75 billion
patacas ($2.97 billion), according to Macau's Gaming Inspection and
Coordination Bureau.
For the most recent period, Wynn reported revenue from its Macau
operations fell 32% to $761.2 million, with table games turnover in
its VIP segment declining 39.9%.
Average daily rates rose 5.4% to $332, while occupancy reached
98.6%, compared with 96.7% for the year-earlier period.
Revenue per available room, a closely watched figure to measure
performance in the industry, rose 7.9% to $328.
Chief Executive Stephen Alan Wynn told investors in a conference
call to discuss third-quarter results in October that Wynn remained
"very bullish" on Macau, saying he expected a slight improvement of
mass market margins citing a "dramatic capacity increase" in its
Macau hotel in January along with the planned opening of Wynn
Palace in Cotai in the first half of 2016.
In addition to its majority-stake at Wynn Macau, Las Vegas-based
Wynn Resorts owns a resort in Las Vegas and is developing a resort
in Everett, Mass., north of Boston.
In the latest period, Wynn's Las Vegas operations posted a 5.8%
decrease in revenue to $376.8 million. Average daily rates rose
5.9% to $271, and occupancy improved to 82.1% from 80.8%. Net
casino revenue fell 15.5% to $171 million.
Revenue per available room rose 7.2% to $222.
Overall, Wynn reported a profit of $109.3 million, or $1.07 a
share, down from $213.9 million, or $2.10 a share, in the year-ago
period. Excluding preopening costs and other items, profit fell to
$1.20 from $2.27 a share a year earlier.
Net revenue fell 25% to $1.14 billion.
Analysts surveyed by Thomson Reuters expected $1.43 a share on
$1.21 billion in revenue.
Write to Maria Armental at maria.armental@wsj.com
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