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Wynn hit by Macau and Vegas decline in first quarter results

News

Casino giant Wynn Resorts has reported a 3.7% year-on-year drop in revenue for the first quarter of the year, due in part to declines from its Wynn Macau and Las Vegas operations. 

Revenue for the three months ended March 31, 2019 fell to $1.65bn (£1.27bn/€1.47bn), with the Macau-based Wynn Palace the star performer of the quarter. The venue reported a 9.1% increase in operating revenue to $726.6m.

However Wynn’s other property in the region, the Wynn Macau, saw operating revenue decline 15.3% to $523.9m, while revenue from its Las Vegas operations was down 7.1% year-on-year at $401.0m.

Across the business, casino revenue accounted for $1.2bn of the group total, down 4.6% from Q1 2018. Room revenue increased marginally to $191.3m, with food and beverage contributing $173.2m. Revenue from entertainment and retail, however, fell to $102.0m.

Total operating expenses for the quarter fell 22.3% to $1.40bn, largely due the prior year period including costs of $463.6m, related to a litigation settlement. This left an operating profit of $255.2m, a swing upwards from a $81.3m loss in Q1 2018.

Other expenses amounted to $93.8m, largely due to interest expenses, with post-income tax profit standing at $159.7m. Following a $54.9m charge in other interests, the operator’s profit was $104.9m, an improvement on a $204.3m loss in Q1 2018.

Looking ahead, Wynn chief executive Matt Maddock said the company’s Encore Boston Harbor resort was likely to open in mid-2019. He added that an investigation into Wynn Resorts by the Massachusetts Gaming Commission, over former CEO Steve Wynn’s behaviour, which ultimately saw the operator fined $35m, would not impact the plans.

With a number of conditions attached to Wynn’s license as a result of the case, Maddock Wynn was currently studying a number of additional licence conditions imposed as part of its settlement, which may lead to an appeal. However, he said that even launching an appeal or calling for a judicial review of the settlement was unlikely to impact the launch plans.

Wynn is also in the process of constructing a 430,000 square foot meeting and convention centre at Wynn Las Vegas, as part of its redevelopment of the centre’s golf course. It aims to reopen the golf course in the final quarter of 2019, then the convention centre in Q1 2020.