Profits miss mark at Wynn Macau

Wynn Macau yesterday reported a second-quarter profit that was below analysts' expectations as revenue from high-stake gamblers slowed and ongoing renovation work raised costs.

The casino operator, owned by American billionaire Steve Wynn, reported adjusted earnings before interest, taxes, depreciation and amortisation of US$290.1 million last quarter, down 4 per cent from last year. This falls short of the US$296 million median estimate of nine Bloomberg analysts.

Wynn Macau's revenue grew 2.6 per cent to US$930.9 million, while revenue from Wynn Resorts' Las Vegas operations jumped 16.2 per cent. VIP turnover shrank 1.6 per cent to US$29.9 billion whereas mass-market profits increased 8.5 per cent.

Victor Yip, an analyst at UOB Kay Hian, said: "The revenue for the VIP business did not change much, but poor luck, which affects receipts and margins, dragged profit down."

He said the overall win rate was in line with expectations, but the rate for the junket business was close to 4 per cent. The rate for the direct VIP business, which has higher margins, fell below 2 per cent.

The company began renovating 600 rooms at Wynn Macau last quarter, bringing the number available down by 5 per cent. It said the work would be completed by the end of the year.