Q1 almost exactly in line with our property level EBITDA estimate and nicely above the Street. Positive forward commentary
CONF CALL NOTES
- Construction of Wynn Palace on schedule, will open 6 quarters from now (552 tables). Still want to open up in 1Q 2016 before CNY.
- LV hotel occu +12.6%, REVPAR up 12.7%; ADR; most profitable hotel in Nevada
- Low hold impacted LV by $10MM. Hotel room pace for 2014 is going well.
- LV 2Q: 6-7% higher than previous year
- Steve Wynn thinks LV is growing into additional capacity that was added in the past and feels good about it, finally
- Wynn Macau:
- No hold impact in 1Q; junket margins stable
- Flow through very very strong
- Moving poor performing mass tables into premium table games (62 premium mass tables games); 492 total tables
- April mass revenues up 55%; April: VIP up 10% (outpaced the market)
- This translates into US$122m in mass revenues and US$257m in VIP revenues
- We think Wynn gained mass share in April and possibly VIP share as well if the VIP market was flat or worse.
- Slot win outpacing market
- EBITDA per position trending 35/40% higher than nearest competitor
- Wynn Palace: no trouble finding construction workers. Have 2,000 workers on site; will have 3,000 people by October.
- Other Cotai sites under construction look more disoriented
- In 60 months, Macau/Henqian Island will be most robust tourist destination in the world, competing with Orlando, Los Angeles, etc.
Q & A
- Macau: 213 average mass tables in 1Q; converting some of junket space into premium mass business
- $5MM receivable credit in Macau: collected receivables that were 100% reserved
- % of EBITDA coming from Mass: not buying the business
- Table win per unit
- LV: when customers get lucky, drop goes down. When win is down, credit is also down.
- Handle: credit slips with markers and cash
- Do not have 'table drop' until the customer loses
- No construction disruption on mass business
- Table mix at Wynn Palace will be similar to Wynn Macau
- In the past few weeks, have migrated some VIP tables to premium mass tables.
- Wynn Palace: Hotel Cash room: 700 sq ft; majority of rooms will be +900 sq ft
- Do not advance VIP credit for more than 30 days. WYNN settles at end of every month. Not worried about VIP credit.
- Thinks Venetian Macau cannibalized Sands Macau
- Wynn Macau earnings went up, even with all the new casino openings; has held their market share; believes market share will hold its own at Peninsula when Palace opens.
- China: Corporate credit is very different from consumer credit
- Finished financing recently. Last tranche: $750MM bond at 5.09% with no covenants, non-recourse.
- Total Cotai financing at $3.85bn at average cost of 3.3%
- Capital structure is in 'nirvana' - low interest rates, long maturities, low covenants
- Highly confidence in getting the 552 tables for Palace
- Want to do the basics better in Macau
- Most successful largest grossing casino on Gulf Coast is Beau Rivage.
- Japan: Diet will discuss study bill in May. Tokyo, Osaka, Okinawa - potential sites.
- More optimistic than ever on Japan
