Wynn Resorts reports unexpected loss
Written on August 2, 2006 by admin
Comment - Looks like Wynn Resorts needs also Macau to be successful likes its competitor Las Vegas Sands. Its bulk of profits are now coming from its Sands Macau Casino operations. Can Wynn Resorts expect the same results from its Wynn Macau Casino. We tend to think so with winning margins higher than in Las Vegas, are we right, well guess only time will tell us that!
(WYNN) reported an unexpected second-quarter loss as the overall win percentage dropped at its namesake Las Vegas casino. The company, which currently operates just one property — Wynn Las Vegas — posted a loss of $20.1 million, or 20 cents a share, compared with a loss of $41.8 million, or 43 cents a share, a year earlier.
Excluding $15.2 million in pre-opening expenses, property charges and increases in swap fair value, the loss amounted to $4.9 million, or 5 cents a share. Analysts expected a profit of 5 cents a share, according to Thomson First Call. Net revenue totaled $273.4 million, up from $201.1 million a year earlier and topping analysts’ forecast of $269 million.
The company’s results were dragged down by lower margins, which Wynn said primarily stemmed from a low hold percentage, or share of gambling money kept by the casino, in June. Slot-machine revenue held its pace in the quarter, but the company’s win percentage at table games came in at the lower end of expectations.
“Some of the big players got sort of even with us in June,” said Chairman Stephen Wynn on the company’s conference call. Wynn Las Vegas opened to big crowds in the second quarter of last year.
Lately, the company’s shares have come under pressure as investors fret about slowing U.S. consumer spending hurting Las Vegas casino profits. The company is constructing a 20-acre hotel and casino project, called Encore at Wynn Las Vegas, next to the current Wynn site.
Wynn Macau is being constructed and will open in phases, with a total project budget of $1.2 billion. The first phase will open in September 2006 and will utilize approximately 11 acres of a total site area of 16 acres of land and features 600 hotel rooms and suites, approximately 210 table games and 380 slot machines in approximately 100,000 square feet of casino gaming space, seven restaurants, approximately 26,000 square feet of retail space, a spa, a salon, entertainment lounges and meeting facilities. The second phase will include approximately 135,000 square feet of additional casino space, one restaurant, retail space, a theater, and a dramatic front feature attraction. The second phase is expected to be completed and open to the public by the end of 2007.
The construction of Phase I of Wynn Macau is nearing completion and the majority of the areas has been finished and is being turned over to operations. Hotel room and banquet facility reservations are being accepted and online reservations can be made through www.wynnmacau.com. There are currently 3,500 employees on staff and the remaining 1,500 employees will start by the second week of August. The employees who are on staff are undergoing training by 250 supervisors who are leading the efforts. Several areas such as information technology, security and surveillance and the employee cafeteria, are fully functional.
As of June 30, 2006, the Company has incurred approximately $716.0 million of a total project budget of approximately $1.2 billion (including the expansion of the second phase).
We continue to make progress on our land concession discussions for a 54 acre site on Cotai in Macau and expect to finalize those discussions in the third quarter of 2006.
Wynn shares recently were up $1.76, or 2.9%, to $63.46 in after-hours trading.(The Street.com)
Technorati Tags: cotai, Entertainment, macau, Macau Casino
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