According to analysts, although Wynn Resort’s second quarter numbers have taken a hit, the announcement of a solid opening date for Wynn Palace on the Cotai Strip brightens the picture.
This years second quarter results for Wynn Macau were mostly below analysts’ forecasts as the conglomerate saw an abrupt decrease of 44 percent in annual earnings, before taxes, interest, amortizations and depreciation. Low hold rates in mass market gaming? were to blame for lower than anticipated results, according to analysts. “The company continues to experience margin compression as it carries excess operating costs (particularly labor) in preparation for the opening of Wynn Palace on Cotai,” said Wells Fargo analyst Cameron McKnight.
In the month of June casino gaming revenue in Macau hit a low not seen in nearly five years, although the decline was slightly better than both analysts and the local government had predicted. Figures released on Wednesday by Macau’s Gaming Inspection and Coordination Bureau (DICJ),? have June’s gaming revenue total slipping to MOP 17.4b (US $2.2b). That figure represents a 36.2% year-on-year decline and the lowest monthly total since November 2010. A thirteen month decline extends Macau’s revenue loss in June, but that rate of deline has slowed a bit every month since February, when a record 48.6% shortfall was recorded. The numbers still don’t look promising as Macau sees a 37% year to date decline from the same period last year.
With the government agreeing to the corporation’s final request for labor, the planned $4 billion resort on Macau’s Cotai Strip, Wynn Palace, is scheduled to open the first half of 2016.