Wynn Resorts boss Steve Wynn said his casino firm’s Q4 and full-year numbers “as usual speak for themselves,” and as usual, those numbers were saying ‘cha-ching.’ Wynn reported revenue of $1.52b in Q4, up from $1.29b in the same period in 2012. Wynn’s operations in Macau earned the lion’s share of Q4 revenue at $1.12b (+24.6%), while Wynn’s Las Vegas properties rose 2.4% to $400m. Net income nearly doubled to $213.9m.
For the full year, Wynn revenue rose 9.1% to $5.62b, while net income rose to $728.6m from $502m in 2012. Wynn closed out the year with $2.9b cash and equivalents vs. $6.6b in total debt. Wynn shares closed out Thursday up 4% but have risen a further 8.5% in after-hours trading.
Wynn’s Macau properties enjoyed strong growth across all sectors in Q4, with VIP table game turnover up 23.9% to $34.4b and a win rate of 2.92%, at the upper end of the expected range. Mass market table win rose 34.6% to $292.9m thanks to mass win rate increasing from 31.1% to 42.3%, more than compensating for a 1.1% fall in table drop. Slot handle rose 28.3% despite the number of Wynn slots in operation falling by 81 machines year-on-year. Wynn closed out the year with 513 gaming tables in Macau (283 VIP, 220 mass market, 10 poker) and 866 slot machines.
In Nevada, net casino revenue was up 12.1% in Q4 thanks to a 6.6% increase in table games drop and a better than expected 28.8% win rate. Slots handle fell 3.5% and slots win dropped 6.3%. While everyone keeps talking up Vegas’ rebirth as a DJ party town, Wynn’s food and beverage revenue fell 11.7% to $98.1m “due to declines in nightclub and catering revenues.” (Please come back, Prince Harry.)
STEVE TALKS UP WYNN PALACE, DISSES THE SHERATON
Looking ahead, Steve Wynn is eagerly awaiting the H1 2016 opening of the $4b Wynn Palace on Cotai, but Steve insisted that Wynn Encore on Macau’s peninsula would not “become a stepchild.” Steve acknowledged that Las Vegas Sands’ Venetian was Macau’s market leader but pointed out that Wynn Encore did 80% of the Venetian’s earnings despite the Venetian having “3x as many rooms, 250% more machines [and] 50% more tables.”
Steve said he “can’t stress enough that, in a casino, it’s all about who’s sitting at a slot machine, who’s sitting at a table. How else could 900 slot machines at Wynn outperform over 2k machines at the Venetian, where there’s 3k rooms instead of 1k? It’s who’s at the chair that matters.”
Steve said Wynn Palace’s Phase 2 would “stake a permanent claim on the premium mass market business in Cotai” by building two towers encompassing some 1,500 apartments, each one offering about 1,400 square feet of legroom. “We’re going to give everybody who wants to go a casino a living room, a bedroom, a his and her bathroom and a massage room” plus an 80-inch television. “Imagine if we get into a contest … do you think a gambler would like to do that or would they rather stay in the Sheraton?”
Steve dismissed the notion that the opening of so many new mega-casinos on Cotai in the next few years would lead to supply exceeding demand. “There’s so many Chinese folks and folks in Asia that are visiting. The visitation length is growing. The frequency is being replaced now by new blood that’s coming to the market every day.”
As for opportunities in Japan, Steve said it would be at least two years before the real bidding for casino concessions began. “If they have anything this year, it will be a study bill. And then the study bill will take up another year or so and then we’ll be in a decision mode in 2016.” By that time, the opulent Wynn Palace will have opened, and Steve believes that casino “will be the best and most coercive influence” on regulators when it comes to sorting through the hordes of casino applicants.
