There are plenty of wealthy Chinese travelers and gamblers with pockets full of cash to spend, as Wynn put it, even as the Chinese economy sees a slow down. Signs already point to Macau's casinos bottoming out and bouncing back.
Wynn Resorts Ltd. reported fourth-quarter earnings that beat analysts’ estimates as revenue growth in Las Vegas partially offset a decline in the Macau business.
Earnings excluding some items fell to $1.03 a share, the Las Vegas-based company said Thursday in a statement, compared with the 76-cent average of estimates compiled by Bloomberg. Revenue fell 17 percent to $946.9 million, compared with estimates of $949.5 million. Wynn got 70 percent of its revenue from Macau in 2014.
Macau earnings before interest, taxes, depreciation and amortization fell 34 percent to $160.1 million. Las Vegas Ebitda rose 15 percent to $127.4 million.
Wynn Resorts, like other Macau casino operators, has suffered through a two-year slump in betting by high-rollers. Betting revenue in the Chinese enclave fell 27 percent to 54.8 billion patacas ($6.8 billion) in the fourth quarter. Still, that was the smallest quarterly decline of 2015, leaving some analysts to suggest the market may be bottoming out.
Shares of Wynn Macau rose as much as 4.8 percent to HK$7.86 in Hong Kong trading. The other four casino companies listed in the city also climbed, with MGM China Holdings Ltd. up 4.2 percent and Sands China Ltd. 3.3 percent. The benchmark Hang Seng Index lost 0.8 percent as of 10:03 a.m.
January was the Macau business’s “best month in a long time,” billionaire founder Steve Wynn said in a post-earnings conference call. The company is seeing some pickup in hotel occupancy and stabilization of some retailers as well as visitation to its casino, said Wynn Resorts President Matt Maddox.
Wynn said he expects the number of junket operators, which bring in high rollers to its Macau casino, will drop to as low as four, about half of the current number because of weakness in some operators. Still, there’s no shortage of wealthy gamblers in China and he expects to draw them to his casino, the gambling mogul said.
The company said it’s working with its contractor in Macau and still hopes its new casino in the developing Cotai district will open on June 25. The $4.1 billion Wynn Palace is one of three new casinos expected to open in 2016 from the U.S. based- companies operating there.
–With assistance from Stephanie Wong.
This article was written by Christopher Palmeri from Bloomberg and was legally licensed through the NewsCred publisher network.
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Photo credit: U.S. casino magnate Steve Wynn, head of Wynn Resorts Ltd and Wynn Macau Ltd, speaks during a news conference in Macau. Reuters / Bobby Yip