WYNN 2Q 2013 CONFERENCE CALL NOTES

07/29/13 09:28AM EDT

Headline miss but actually not a bad Q. July commentary was positive.

CONF CALL 

  • WYNN COTAI
    • Maximum Cotai project cost (all-in including pre-open and cap int of $500m): $4 billion, could be a little less
    • Projected to open CNY 2016
  • Ex credit adjustment in 2Q 2012, Macau would have been up a little bit YoY
  • Little behind in slot (hold, not coin-in)
  • Mass win: July up 22% YoY and up 13% sequentially 
  • EBITDA share: 16% 

Q & A

  • Concession renewals:  comfortable being in Macau 
  • Macau VIP margins:  held less than 2% in direct play, held high on junkets. mix negatively impacted margins
  • Mass:  hold issues in slots and mass tables in June; that has corrected in July
  • Half of cash investments is in Macau
  • International Vegas breakout:  table win - 52% Asian, 24% Latin, 24% domestic;  $25-30MM of the $177Mm slot win is international
  • Vegas:  Upside to margins due to increasing international exposure
  • Macau Premium-mass segment:  hyper competitive; not competing in the high discounting/promotional environment
  • Mild construction impact in Macau; 600 room refurbishment in Wynn Tower - will be finished in late October
  • Capital allocation:  $1 in dividend per quarter; if excess CF, board will decide.  Cotai project:  $200MM accordian structure Libor +175bps
  • Philly/Boston:  5-6 applicants in Philly; MA - ongoing suitability investigations
  • Investments:  Philly $900MM ($300-400MM equity):  Boston $500-550MM ($300MM equity)
  • High-end slot limit rooms:  very-well received; catching up to competition
  • Missing out on rising table minimums in Cotai?  Not much impact.  Average bet at WYNN is pretty high.
  • Non-gaming will drive Vegas business; can withstand the competition; MGM throws plenty of money at customers
  • Vegas recovery?  Vegas doing better YoY but wouldn't say a recovery yet.  Additional capacity that came online during recession was badly timed.
  • Not having a 'real recovery' in the US
  • China macro impact:  very cautious with credit and collections but have not seen the impact
  • Sees visitation pick up in Guangdong areas;  getting more people to stay longer
  • Cotai capex contribution:  $300MM to date; expect another $300MM for rest of 2013; $1 billion in 2014; vast majority of rest in 2015/2016 - will utilize 30% of FCF
  • Cotai Features:  Wynn Palace - name of hotel; lake/fountains similar to Bellagio; capture light-rail traffic through gondola
  • Japan:  no comments; interested in Tokyo and Osaka 
© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.