Wynn Macau Advances After First-Quarter Profit Surges 66%
The owner of Macau’s Wynn and Encore casinos gained 1.1 percent to HK$27.35 at the close in Hong Kong trading after climbing as much as 4.8 percent to HK$28.35, the highest intraday level since it started trading in October 2009. The benchmark Hang Seng Index rose 1.6 percent.
The opening of a second resort in the world’s biggest gambling hub and better-than-expected winnings in Las Vegas led parent Wynn Resorts Ltd. (WYNN) to post a sixfold growth in first- quarter profit, beating analysts’ estimates. The company expects government permission to start building a third Macau resort “any day now,” Wynn said yesterday.
“Wynn Macau is the best proxy of Macau,” Karen Tang, a Hong Kong-based analyst for Deutsche Bank AG, wrote in a note to clients today. Its casinos offer “superior customer experiences, which lengthen play,” she said.
Wynn Macau opened Encore Macau in April 2010 in the former Portuguese colony, the world’s biggest gambling hub and the only place in China where casinos are legal.
First-quarter net income at Wynn Resorts expanded to $173.8 million from $27 million a year earlier, the Las Vegas-based company said yesterday.
Wynn Macau’s profit grew to $189.7 million from $114.3 million, it said today. VIP sales rose 45 percent to $29.3 billion, and slot-machine revenue increased 59 percent to $1.5 billion, the company said.
“This quarter, the most impressive segment was slots,” Tang said. “Wynn Macau has carved out a nice niche in the high- end slot segment in Macau.”
Gambling in the Chinese city has surged since the government ended billionaire Stanley Ho’s 40-year monopoly and allowed companies including Wynn, Las Vegas Sands Corp. (LVS) and MGM Resorts International (MGM) to build resorts.
Casino gambling revenue in Macau climbed 43 percent to 58.5 billion patacas ($7.3 billion) in the three months ended March as gamblers from mainland China placed more bets. Total casino revenue expanded 58 percent last year to 188.3 billion patacas or $23.5 billion, about four times that of the $5.8 billion for the Las Vegas Strip.
Chinese High Rollers
Revenue from VIP or high-stakes gamblers, who wager as much as 2 million patacas a hand, was 42.6 billion patacas, accounting for 73 percent of Macau’s total first-quarter casino gambling revenue, government data show. That’s up from 70 percent in the same period in 2010.
Most of the VIP gamblers are brought into the city by junket operators from mainland China, which doesn’t include Hong Kong, Macau and Taiwan.
Wynn is founder and chief executive officer of Wynn Resorts, which owns about 72 percent of the Hong Kong-listed Macau unit.
Separately, Galaxy Entertainment Group Ltd. (27) posted a 71 percent increase in earnings before interest, taxes, depreciation and amortization to HK$712 million ($92 million) today, and predicted record first-half earnings on revenue from high-stakes gamblers.
Galaxy, part-owned by Permira Advisers LLP, surged 6 percent to HK$13.82 in Hong Kong trading, the highest level since it began trading in October 1991.
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