Q3 growth was down to a spike in revenue in Macau, with both the Wynn Palace and Wynn Macau properties reporting growth. This followed the removal of Covid measures in the region, allowing VIP and high-value customers to return.
Wynn expects continued growth in Macau but also talked up growth opportunities in other markets, including the UAE. Construction work continues on the Wynn Al Marjan Island on the man-made Al Marjan Island in the Emirate of Ras Al-Khaimah.
The UAE venture will cost approximately $3.90bn but, according to CEO Craig Billings, the region represents the most exciting new market opening in decades.
“We believe it’s highly unlikely that every Emirate will ultimately avail themselves of the right to host an integrated resort,” Billings said. “Our view is that it will likely be us and us alone for a multi-year period given that we are well underway on construction now.
“We all know the advantages of being first as we have seen in other markets. After that, it may be a duopoly or an oligopoly of three. But I find either ultimate market structure undaunting given the database advantages of being first and the fact that we’ve very successfully operated in the two most competitive markets in the world: Vegas and Macau.
“As I’ve said before, this is the most exciting new market opening in decades.”
Macau drives revenue growth at Wynn in Q3
Focusing on the Q3 results, Wynn posted growth across all core parameters during the three months to 30 September. Casino was by far the main source of revenue, with this jumping 170.2% on the back of Macau’s relaxed restrictions.
Rooms revenue increased 46.7% to $289.3m, food and beverage revenue climbed 17.7% to $267.4m and entertainment, retail and other revenue 32.3% to $142.7m.
In Macau, Wynn Palace posted $524.8m in total Q3 revenue, an increase of 597.9% on last year. Wynn noted that both table games win percentage (23.3%) and VIP table games win as a percentage of turnover (3.4%) were ahead of expectations.
Over at Wynn Macau, revenue also rocketed 630.2% following the easing of Covid-19 rules. Again, Wynn said that table games win percentage (16.5%) and VIP table games win as a percentage of turnover (3.5%) beat guidance for Q3.
Success in Vegas but Boston revenue dips
Turning to the US, Las Vegas operations generated $619.0m in revenue during Q3. This, the operator says, is 13.7% higher than in the same period last year.
Table games win percentage in Las Vegas was 26.0%, which was at the top end of the 22.0% to 26.0% range forecast by Wynn. It was also ahead of the 20.7% noted in Q3 last year.
However, revenue at the Encore Boston Harbor edged down 0.7% year-on-year to $210.4m. This was despite table games win percentage reaching 20.8%, within the 18.0% to 22.0% range stated by Wynn.
Macau reopening leads to higher costs
The full reopening of the Macau market inevitably led to higher costs at Wynn. During Q3, total operating costs hit $1.61bn, up 70.7% year-on-year. Casino was the main outgoing by some margin at $577.7m.
Net other expenses amounted to $185.9m, which put Wynn at a pre-tax loss of $123.3m. This, however, was an improvement on last year’s $206.4m loss.
Wynn received $2.7m in tax benefits but took off $3.9m in income from non-controlling interests. As such, net income less attributable to Wynn was $116.7m, shorter than the loss of $142.9m in 2022.
In addition, adjusted earnings before interest, taxes, depreciation, amortisation and rent costs (EBITDAR) jumped 205.7% to $530.4m in Q3.
Could Wynn reach net profit in the full year?
Looking at Wynn’s year-to-date performance, revenue in the nine months to 30 September was 70.5% higher at $4.69bn. This includes $2.65bn in casino revenue, $838.4m from rooms, $757.1m in food and beverage revenue and a further $443.5m from entertainment, retail and other activities.
Operating costs climbed 42.6% to $4.21bn and net other expenses amounted to $471.4m. This left a pre-tax profit of $11.0m, in contrast to last year’s $672.6m.
Wynn paid $2.6m in tax and discounted $7.6m in income from non-controlling interests. This meant it ended the period with a net profit of $838,000, compared to a $456.3m loss in the same nine months last year.
In addition, the operator said adjusted EBITDAR in the year to date was 180.0% higher at $1.48bn.
“Our third quarter results reflect continued strength across our property portfolio,” Billings said.