Wynn Macau Ltd. (1128), the Hong Kong-listed unit of billionaire Steve Wynn’s Las Vegas company, reported a 10 percent increase in first-quarter profit as Chinese tourists drove up revenue in the world’s largest gambling hub.
Net income rose to $209.2 million from $189.7 million a year earlier, the company said in a statement to the Hong Kong stock exchange today.
The casino operator this month said it won a land grant from Macau’s government to build its second resort in the former Portuguese colony. Wynn Macau will join Sands China Ltd. (1928), Galaxy Entertainment Group Ltd. (27), and Melco Crown Entertainment Ltd. (MPEL) in expanding into the city’s increasingly popular Cotai Strip.
The new project is unlikely to open before late 2016, Anil Daswani, an analyst at Citigroup Inc. in Hong Kong, wrote in a note to clients today. “Wynn Macau could halt its special dividend” because of the expected large capital expenditure on the project, Daswani wrote.
The Macau government approved a 51-acre concession on the Cotai strip, the unit of Wynn Resorts (WYNN) Ltd. said on May 2.
Wynn Macau fell 1.5 percent to HK$22.50 as of 11:15 a.m. in Hong Kong trading, while the benchmark Hang Seng Index was little changed. The stock has climbed 15 percent this year, lagging behind Sands China’s 34 percent gain and Galaxy’s 62 percent jump.
Wynn Resorts Misses
Parent Wynn Resorts earlier reported first-quarter earnings fell 19 percent, missing analysts’ estimates, on lower winnings in Las Vegas. Net revenue in Macau surged to $950.7 million from $865.7 million a year earlier, Wynn Resorts said in a statement.
Macau is the only place in China where casino gambling is legal. The Chinese city had $34 billion in gambling revenue last year, almost six times the $6.07 billion of the Las Vegas Strip, according to government figures.
Wynn Resorts has been fighting a legal battle with Japanese billionaire Kazuo Okada, who opposed the company’s HK$1 billion ($129 million) pledge in July 2011 to the University of Macau Development Foundation. The Universal Entertainment Corp. (6425) chairman and the former Wynn Resorts vice chairman filed a petition in state court in Clark County, Nevada, in January for access to financial records.
Wynn sued Okada in February and redeemed his 20 percent stake in Wynn Resorts saying he was “unsuitable.” Okada is challenging the redemption.
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