Wynn Resorts reports net loss in 16Q3; Palace still ramping

Casino operator Wynn Resorts reported a net loss for the third quarter of 2016, down 118.1 percent year-on-year to $17.4 million.

While Macau GGR has been on an upward trend over the last three months, net revenue from its Macau operations fell 11.5 percent in 16Q3 to $518.1 million.

Adjusted Property EBITDA from Wynn Macau was $151 million for the quarter, down 7.3 percent from $162.8 million for the same period of 2015.

Meanwhile, Wynn Palace in Cotai, which opened in August, reported net revenues and adjusted property EBITDA at $164.6 million and $25.5 million, respectively, for the third quarter of 2016.

Company officials complained that construction in the area had “made access to the Palace temporarily highly encumbered,” said chief executive Steve Wynn said in a conference call with analysts Wednesday, quoted by Reuters.

“We literally couldn’t get across,” Wynn said. “We had to take a very risky approach and dodge cars for me to get to the City of Dreams. I hadn’t expected that it would be at this stage when we opened in August, but there it is.”

Analysts from Wells Fargo say the results are likely to disappoint investors, despite already low expectations.

The brokerage also noted Wynn Palace needs more casual dining.

“Wynn Palace ramp up has been slow during the first six weeks of operation delivering EBITDA of US$26 million,” said Bernstein in a note on Thursday. “While Wynn Palace ramp up in the near term remains challenged due to location and some other issues, over the next few months, we believe  that ramp up will accelerate at the property as October has shown continued improvement.”

 “We continue to believe the property is strongly positioned in the market and should achieve ramp up over the next 12+ months,” the brokerage added.