Wynn Resorts Limited (WYNN)’s Macau Operations Experience 32% Drop In Revenue
As far as casino gaming was concerned, Macau operations were one of the key areas for Wynn Resorts Limited (NASDAQ:WYNN). Investors’ and analysts’ were worried about the extent of damage Macau region could pose to the gaming companies. The Chinese government has taken steps to stop illicit money being routed through the gaming center of Macau and many have worried about the impact on the region which plays a key role for gaming players.
As a result, Wynn Resorts, Limited (NASDAQ:WYNN) suffered revenue drop during the fourth quarter of 2014. China’s action was a big blow to the gaming companies since over 60% of revenue was generated from the Macau region. The region’s 32% revenue drop also hurt its bottom line that fell shy of the Street expectations.
The company stated that net revenue from Macau dipped 32% to $761.2 million from $1.12 billion in the year-ago quarter. Similarly, its adjusted EBITDA also witnessed a downside of 35.5%. Macau’s table games revenue in the VIP section witnessed a steep fall of 39.9% to $20.7 billion. The company stated that the win percentage of 2.8% was within the estimated 2.7 – 3.0% range. However, it was lower than the previous year quarter’s 2.92%. The average VIP Tables number fell to 244 units from 273 units reflecting the fallout of China’s actions.
Las Vegas operations for Wynn Resorts Limited (NASDAQ:WYNN) failed to offset even partly the loss of revenue from Macau. The Las Vegas unit suffered a 5.8% fall in net revenues to $376.8 million from $400.0 million. Similarly, adjusted EBITDA also witnessed a 10.4% drop.
The company stated that it was developing a Wynn Palace in Macau with a 1,700-room hotel having facilities like retail offerings, spa, casino, meeting place and food and beverage. Wynn Resorts expects the resort to be opened in the first half of the next year.
The company reported 49% drop in net income to $148.19 million or $1.07 a share from $290.486 million or $2.1 a share in the prior year quarter. Adjusted net income also plummeted 27% to $122.45 million or $1.2 a share from $231.23 million or $2.27 a share in the year-ago quarter. Street analysts’ expected $1.43 a share.
Wynn Resorts Limited (NASDAQ:WYNN)’s net revenues dipped 25.1% to $1.14 billion from $1.52 billion in the previous year quarter. The company closed the quarter with cash and investment securities of $2.4 billion.
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