Wynn Resorts sees boost in second quarter profit
18 July 2011
18 July 2011 4:31 p.m.
Wynn Resorts once again posted a profit increase in the second quarter, thanks to booming business in Macau and an uptick in Las Vegas.
The Las Vegas-based casino operator reported profit of $200.8 million, or $1.60 per share, compared to $64.9 million, or 52 cents per share, in the same quarter last year.
Net revenue was $1.36 billion in the second quarter of this year compared to $1.03 billion in the same period of 2010. The company said the higher numbers were driven by revenue increases in both Macau and Las Vegas.
Net revenue at Wynn Resorts’ Las Vegas operations was $390.8 million, a 22.8 percent increase from the second quarter of 2010. The company reported earnings before interest, taxes, depreciation and amortization of $132.7 million, versus $65.1 million in the second quarter of 2010.
Marilyn Winn Spiegel, president of Wynn Las Vegas, said on Monday’s earnings conference call that each segment of the company’s Las Vegas resorts saw increases in revenue in the quarter.
Casino revenue in Las Vegas for the second quarter was $158.3 million, up 35 percent from the same period of 2010.
Room revenue was up 15.5 percent to $91 million, with an average daily room rate of $240 at Wynn and Encore, an increase from $197 in the same period last year. Occupancy fell from 92.6 percent to 89.2 percent.
In Macau, net revenue totaled $976.5 million, a 36.7 increase from the $714.4 million generated in the second quarter of 2010. EBITDA in Macau increased 45.4 percent during the year-over-year period from $216.2 million to $314.3 million.
Food and beverage revenue increased 13 percent to $126 million for the quarter, with two-thirds of the revenue coming from Encore Beach Club, Winn said.
Retail revenue rose 6.5 percent to $22.8 million and entertainment revenue increased 22 percent to $19 million. Winn said the increase in entertainment was mainly because of added show dates for Garth Brooks.
“In the business that we are in, you don’t really sustain growth unless the non-casino part of the hotel reflects improvement," Wynn Resorts Chairman and CEO Steve Wynn said on Monday’s conference call. "The vitality in our business comes from the non-gaming portion. After all, slot machines and roulette tables, they are the same everywhere. "It's where they are and who the people are that are staying at the hotel that make the difference."
As for the current quarter, Wynn said the company expected July to be its worst month of 2011 in Las Vegas, but has seen better occupancy with higher rates than expected. Wynn, once again, reiterated that the company is not discounting room rates to fill rooms during the slower months.
“This place is not set for price-cutting. We’d be able to fill our rooms in an instant because they are so fancy. But you’ve got people coming in with their beers from 7-11 and they move their own bags and don’t eat in our fine dining. We can’t use them. This is not a place for folks that have that kind of economy mentality,” Wynn said.
Wynn said the company expects August to bring strong convention business at its Las Vegas properties.
In Macau, Wynn Resorts saw its net revenue total $976.5 million, a 36.7 increase from the $714.4 million generated in the second quarter of 2010. EBITDA in Macau increased 45.4 percent during the year-over-year period from $216.2 million to $314.3 million.
The average daily room rate for Wynn and Encore Macau was $314 for the second quarter, up from $287 in the second quarter of last year. Occupancy at the properties was 90.5 percent, compared to 81 percent a year ago.
Wynn was more tight-lipped about his Cotai resort on Monday’s conference call than in previous calls, but said the project is drawn and rendered and the process is “moving along nicely.” He did not give a timeline for development.
Wynn said the resort will include 1,500 suites, 500 table games, a theater and public entertainment.
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