China – Wynn calls for end to ‘plaguing’ uncertainty in Macau
Having seen shares in Wynn Resorts slide by ten per cent, owner Steve Wynn wants Macau’s government to provide some certainty to the market which has plummeted due to China’s anti-corruption drive.
Wynn saw its Macau revenue drop by 38 per cent in the first quarter with VIP tables down 52.4 per cent decrease from US$36bn in the first quarter of 2014 to $17.1bn.
Mr. Wynn said: “There’s no question that uncertainty is the plaguing word of the day in Macau. Hopefully, our government in Macau will calm that down and put some certainty back into the picture. We never know quite what to expect these days.”
Of the uncertainties, Mr. Wynn highlighted question marks over how many workers the government would allow it to hire to build its $4bn Wynn Palace and also ow many gambling tables it would be allowed to operate.
“We’ve struggled with adjusting our work schedule on construction to the permissions we’ve been given for workers on construction by the government,” he said.
He warned that this uncertainty could ‘erupt into protests against the government if it isn’t settled soon.’
The 52.4 per cent decrease in VIP table revenue took it down to $36bn in the first quarter of 2014. The average number of VIP tables decreased to 252 units in the first quarter of 2015 from 279 units in the prior year’s first quarter due in large part to a renovation on a portion of the casino floor. This renovation was completed in February 2015.
Table games win in the mass market segment decreased by seven per cent to $279.6m in the first quarter of 2015. Mass market table games win per unit per day decreased by 7.5 per cent to $14,517 from $15,695 in the first quarter of 2014. Drop in the mass market segment was $591.9m in the first quarter of 2015, down 14.5 per cent from the 2014 first quarter, while the segment’s win percentage of 47.2 per cent was an increase from 43.4 per cent in last year’s first quarter.
Slot machine handle for the first quarter of 2015 declined 25.7 per cent from the 2014 period to $1,039.6m, and slot win decreased by 31.2 per cent. Slot machine win per unit per day decreased 10.8 per cent to $818 in the first quarter of 2015, compared to $917 in the first quarter of 2014, due to lower slot win and a reduction in the number of units on the casino floor.
DS Kim, an analyst with JP Morgan Chase said: “Earnings power proved to be underwhelming versus the most expected, which was disappointing given its market share gain during the quarter.”
Overall, net revenues for the first quarter of 2015 were $1,092.2m, compared to $1,513.6m in the first quarter of 2014 with a 1.6 per cent increase in net revenues from Wynn’s Las Vegas Operations.
