Wynn Resorts posted a 6 percent increase in net income to .9 million in the second quarter on net revenues that soared 44.5 percent over last year to .53 billion, largely on the strength of the company’s Wynn Palace in Macau
Thanks to a $414.7 million contribution from the Cotai resort, which opened last August, the company beat the average of $1.45 billion of 13 analysts surveyed for their projections for the three-month period ended June 30.
A separate survey of 15 analysts projected $1.14 in earnings per share. The company reported adjusted EPS of $1.18.
Chairman and CEO Steve Wynn said in his earnings call with investors that results could have been even better had it not been for construction obstacles surrounding Wynn Palace.
He noted, too, that Wynn Macau on the city’s peninsula side played unlucky.
“We had a most unique statistical anomaly, one that I’ve never seen in my 50 years doing this,” he said. “Even with enormous volume, one of our leading outlets lost money for an entire month. In April, the bottom fell out and all the players won millions of dollars.”
At Wynn Palace mass-market revenue fell 9 percent year on year, offsetting a strong performance in the VIP sector marked by a 35 percent increase in table games volume compared to Q2 2016.
The decline was due to the “rather unique and unprecedented obstacles,” he said, posed by ongoing construction at MGM Cotai, which is slated to open next door later this year, and SJM’s Lisboa Palace.
“The mass market is really affected by the physicality of the neighborhood,” he said, “because the mass market has a lot to do with access.”
There is also disruption on the two sides of the property from construction of a light rail network that ultimately will link the Macau peninsula and Cotai.
In the meantime, the property has elected to take some of its rooms off line on weekdays.
Overall, though, Wynn said he is pleased with the Macau operation and plans to expand it when the opportunity permits.
“We have property on both sides of our current land concession and we have already built connections to both sides of it, so we can build rooms when we want. We will erect beautiful hotel towers with convention and meeting space the minute we’re allowed to do it.”
In Las Vegas he said the company is putting the finishing touches on drawings, plans and permits for the $1.5 billion first phase of the Paradise Park project, which could break ground before the end of the year.
He said the company is also in talks with other parties interested in joining the development, which will cover 140 acres fronting Paradise Road behind his twin resorts, Wynn Las Vegas and Encore.
Plans call for a lagoon, water sports, beaches, a convention facility and new hotel rooms.
“That area is the most precious piece of real estate in the whole resort industry in Las Vegas,” Wynn said. “The conversations I’ve had have been very exciting and give me a lot of optimism about how we will continue over the next four to five years.”
