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AP Photo/Kin Cheung
Wynn Encore Macau, the newest resort, stands in Macau, Wednesday, April 21, 2010. Billionaire Steve Wynn opened his latest hotel and casino in Macau Wednesday and said he aims to start building a massive new resort in the Chinese gambling mecca next year.
Published Thursday, July 29, 2010 | 2:14 p.m.
Updated Thursday, July 29, 2010 | 3:22 p.m.
Wynn Resorts more than doubled its profits during the second quarter of 2010 as business continued to boom in the Macau region of China.
The Las Vegas-based casino operator reported a net income of $52.4 million, or 42 cents per share, compared to a net income of $25.5 million, or 21 cents per share, in the second quarter of 2009.
Net revenues for the quarter totaled $1 billion, compared to $723.2 million in the same period of 2009. The company said the increase was primarily driven by the 74 percent increase in revenues at Wynn Macau.
At Wynn Resorts Macau operations, net revenues were $714.4 million during the second quarter of 2010, compared to $410.4 million in the second quarter of 2009. Wynn Macau generated $216.2 million in earning before interest, taxes, depreciation and amortization, compared to $117.2 million in the same period of 2009.
In April 2010, Wynn Resorts opened its $550 million Encore Macau. The resort included 410 suites and four villas, along with restaurants, high-end stores and a casino.
Wynn Resorts will soon be adding a new property to its Asian portfolio. Wynn Resorts Chairman and Chief Executive Steve Wynn said the company presented its Cotai project to the board of directors shortly before Thursday’s earning conference call. Wynn said they now know the property’s components and what it will look like, but did not share other details besides that it will have somewhere between 1,500 and 1,600 rooms. Wynn said drawings for the project will begin in the next few weeks, and more details and financials will be presented during the third or fourth quarter.
Wynn Resorts Las Vegas operations, which include Wynn and Encore Las Vegas, posted an operating loss of $17.2 million, compared an operating loss of $8.3 million in the same quarter in 2009. Net revenue increased 1.7 percent to $318 million. The results were on target with what the company released in its preliminary earnings last week.
The company reported EBITDA totaled $65.1 million for the quarter at its Las Vegas properties, down 13.7 percent from the second quarter of 2009. Wynn attributed the EBITDA decline to higher employee health care and benefit costs, higher marketing expenses and higher repair and maintenance costs.
In June 2010, Wynn Resorts Chairman and Chief Executive Steve Wynn announced he had laid off 261 employees to reduce overstaff and return 3,700 employees to full-time work weeks and full wages. Wynn said the changes would increase payroll costs by $7.7 million. Without the layoffs, Wynn said it would have cost $10 million to bring everyone back to full-time hours and increased pay.
Wynn and Encore Las Vegas achieved an average daily hotel rate of $197 for the quarter ended June 30, down from $218 in the second quarter of 2009. The properties' occupancy was 92.6 percent, compared to 86.6 percent during the prior-year period.
Wynn said during Thursday’s conference call that the company is in the process of renovating the 5-year-old Wynn Las Vegas. The operator is spending $99 million to redo the hotel’s rooms, with a completion date expected for April 2011, Wynn said. The resort is also adding a new restaurant in the former space of Daniel Boulud and a concept from Morton’s Steakhouse owner Michael Morton. Those will open in October, Wynn said.
“One of the things that’s happening here is as the market softened, many of these companies with very bad capital structures neglected their properties rather severely, and the properties are all showing the wear and tear. The minute the place is not clean or is threadbare, it has a very a bad affected on your clientele,” Wynn said.
Net casino revenue in the first quarter of 2010 was $117.2 million, down 5.8 percent from the second quarter of 2009.
Food and beverage revenue in Las Vegas increased by 11.5 percent to $111.5 million during the quarter, primarily due to the opening of the $67 million Encore Beach Club and Surrender Nightclub in May 2010.
Wynn said the nightclub and pool club have been performing ahead of plan and have had a minimal impact of the resorts’ other clubs.
Entertainment revenue increased by about 27 percent to $15.6 million from the second quarter of 2009 as result of Garth Brooks’ performances and increased revenue from Le Rêve, the company said in the report.
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So when is Wynn going to sell his "losing" properties in Vegas? Or is he going to be "forced" to downsize even more because US labor is so much.
Sun Staff: If you want to get another award winning story, how about a piece on work conditions for people in Macau's casinos?
Tom Shermspun
Great Ruins of Las Vegas Tours
Sun Headline from 7-21-2010 as follows :
" Wynn, Encore 2Q operating loss widens to $17.2M "
???????????
Looks like the gambling mecca of the world is changing from here to Asia. But as the earlier writer posted... working conditions there are probably very draconian.
GRLV Business News (newsflash/satire). Steve Wynn, Sheldon Adelson, and Jim Murren, buried the hatchet today for a landmark pact in Las Vegas history. The CEOS of Wynn, Sands, and MGM agreed that all employees will be paid in "patacas", the monetary unit of Macau. "We thought it was only fair that all employees in our corporations would be paid with the same money," said Sheldon Adelson, CEO of Las Vegas Sands. Gary Loveman, CEO of Harrah's was not in attendance as was showing John Paulson sketches of his Atlantic City themed LINK on the Strip. Also of note: the casinos also agreed to pay Las Vegas workers the same amount as those in China, about $1700 per year.
It's only a matter of time before the tax and spenders take a big chunk out of those profits.
Just the usual assortment of negative comment(s ) from the loser(s) who envy Wynn's success.
The next POST reads, Wynn selling all properties and is moving to Asia.
Hes following the money,smart man.
Tom,
I bet you $100 the working conditions in the Macao Casinos are outrageously better than the working conditions found in inner mainland China.
Wynn's portfolio of businesses is crushing it! Well done Steve-O! All you complainers can eat it.
That's right, Patrick, compare casino worker conditions in Macau to mainland China. That's the mentality that makes it ok to undermine the working class. I guess you'll be ok for awhile, as Las Vegas travels on the road to neoliberal paradise.
VEGAS_IS_CRAP,
California must be really bad if all you can do is hang out here complaining about a city you don't live it and businesses that you know nothing about.
Maybe some time in your life you can take responsibility for your own life and find someplace that makes you happy.
Good luck to you and your poor life.
VEGAS_IS_CRAP, great screen name, btw.
By SAW investing $ abroad and making great bottom line profit, it allows him to invest here, dummy.
You must have missed the part of him putting $99 million into the first towers' room face lifts. Do you think these rooms redo themselves? Uh no, people do the work. Part of that $99 million goes to labor... a nice chunk of it.
I wonder how long China's prosperity will last?
Something tells me they'll end up like Japan. They're going to make a lot of dumb investments and end up going broke.
Congratulations Steve Wynn. With these profits, could you finance The Silver State arena? I hope you would consider this. Thanks.
The last paragraph says it all. Night/Beachclub(s), restaurants, and entertainment are popular while the casino is losing money. They should lower the table limits to let more players in, charge them $5 for a coke a cola on their way out, and make money by getting more butts in the door.
Does this reflect before or after they pay the bribes?
Wynn Resorts reports huge profits, the stock goes up, but the dealers must share their tips with supervisors because Wynn doesn't want to pay better wages to its lower management. Why not instead have some people participate in the company's success?
Let's not forget this: When a casino reports huge profits, somebody must lose that money. The losers are usually (if not almost always) the players/gamblers, and they pay the wages of the dealers and supervisors by tipping in the very few events when they're winning (before they lose it all back again....and some more).
Some casinos participate its staff with the successful operation. Cruise Ships for instance pay nice bonusses to casino managers once the target has been hit. IF the casino manager is smart and gives a share of this bonus to the dealers by simply having them participate in the operational success, the dealers and managers are now sitting in the same boat.
However, greedy managers will never do that, and dealers never like to share their tips with supervisors, so nothing will ever change.
And the profit goes to...... the casino bosses, as always. They win even if the house loses (Harrah's CEO as the best example). I wonder what the Wynn is doing with all the profits they're geneating in Macau? Will they compensate the losses in Vegas or is this 2 pairs of shoes? Is that the reason why the Wynn also is listed on the Hong Kong Stock Exchange? Making it 2 different companies as it comes to profit but putting it all together when things are going bad in general? Is that the strategy?
From Switzerland
Steve Wynn should open a casino in Switzerland.
Call it BorisRSwitzerlandWynnatallcostsbutnopayd...
Boomer from Austra
Those silly Chinese...they will never learn.
Nevada tax rate on gaming =6.25%
Macau = 40%
So how does Macau's success help Las Vegas' sinking economy? Wynn and the others made their fortunes on the backs of the Nevada workers, and the sweetheart deals that the state of Nevada afforded them over the years. Then, they repaid Nevada's generosity by opening casinos everywhere and making sure the Asian High Rollers stayed in Asia; so much for loyalty. The reason Las Vegas used to be recession proof is "it used to be the only game in town"
Wynn Profits: should split supervisor and management bonuses with the dealers, cashiers, housekeeping, dishwashers, just like you split tips!