Wynn’s net revenues in 15Q2 drop to $1 billion as Macau operations struggle

Wynn Resorts’ net revenues for 15Q2 dropped to $1 billion from $1.4 billion in the same period the year before due to the company’s flagging Macau operations.

The decline was the result of a 35.8 percent net revenue decrease from Wynn’s Macau operations and a 6.2 percent decrease in net revenues from its Las Vegas operations. Adjusted property EBITDA was $295.4 million for the second quarter of 2015, a year-on-year decrease of 36.8 percent.

In Macau, the company’s 15Q2 net revenues were $617.0 million, a 35.8 percent decrease from the $960.6 million generated in 14Q2. Adjusted property EBITDA for Macau dropped 43.5 percent $173.4 million.

Table games turnover in the VIP segment was $15.5 billion, a 41.1 percent decrease from $26.4 billion in 14Q2.

The average number of VIP tables decreased to 247 units from 263 units in the prior year’s second quarter.

The company is currently constructing Wynn Palace, a resort which includes a 1,700-room hotel, performance lake, meeting space and casino in the Cotai area of Macau. Wynn said that in July 2013 it signed a $2.6 billion guaranteed maximum price contract for the project’s construction costs, which has now increased.

“During the second quarter of 2015, we invested approximately $431.4 million in our Cotai project, taking the total investment to $2.7 billion through June 30, 2015.”

“The total project budget, including construction costs, capitalized interest, pre-opening expenses, land costs and financing fees, is approximately $4.1 billion. We expect to open our resort on Cotai in the first half of 2016.”