Takeaway: Vegas and Macau miss reduced EBITDA estimates. Still no signs of a recovery in Macau despite a better January for Wynn Macau



prepared commentary



  • January 2014: low hold. January 2015: high hold %
  • Q4 was tough; Golden Week in October was difficult (effects of changes in China have had a negative effect on top-end business)
  • January 2015:  no change in VIP business (volumes down hard).  Occupancy was high. Rolex/Louis Vuitton suffered. Made $80m in Jan 2015 (made $70m in Jan 2014).
  • Mass business in Jan 2015 was up 26%
  • Opening in a week or so a new area dedicated to VIP business
  • February should see an improvement of some sort
  • Thousands of Wynn Macau employees expecting promotions and better lifestyle
  • Wage Palace on budget and on time BUT builder last night said that because of a problem in timing of labor construction permits, it will not open before CNY 2016. So, Palace will open in the latter days of 1H 2016.
  • China remains a big question mark
  • Requested 1,000 additional laborers, got 700 laborers instead

Las Vegas

  • $515m in EBITDA in LV in 2014 encouraging   

Q & A 

  • Smoking ban will be extended to VIP. Will have unintended consequences. However, WYNN has some open terraces that will mitigate some of that no smoking impact.
  • Oct/Nov:  low hold in premium mass area ($15m/$20m EBITDA impact)
  • VIP hold was normal
  • Tables will increase by 40 tables (combination of junket tables/mass tables) and will be ready before CNY 2015.  Will be up to 485 tables in a couple of weeks.
  • LV promos:  nothing unusual
  • Mass improvement in January 2015:   Mainly mid to high end mass. Had been targeting 7,000 mid-mass players and the campaign has been very successful
  • Boston budget:  $1.7-$1.75bn
    • $50m/month in revenues for the state of MA
    • Another $50m/month for surrounding communities
    • Financed at LIBOR + 175bps non-recourse
  • Downturn is HK and Mainland China
  • Capital Allocation:  Always thought dividend would increase.  Lots of cash protecting the dividend and big property opening in 2016
  • No mass table reclassification 
  • Chinese people are cautious. There is uncertainty. Campaign against corruption has been a big wake up call.
  • Have eliminated weaker junkets. Only will deal with strongest junkets (SunCity and Guangdong new to the property).  Now do only with 9 junkets (12-13 junkets in the past).
  • Mass promotional spending as higher % of revenues:  not seeing in any major increase in promotional activity 
  • Wynn palace table count: 'common sense and integrity at end of day will be last word on subject'
  • 2 projects facing Wynn LV: Old Frontier hotel (purchased by James Packer). Old Stardust hotel (purchased by Genting).
    • Wynn sees these projects bringing more business to Vegas 
  • Raised Vegas pricing by 18% starting Labor Day
  • Mass margins have been very consistent.  Poor retail performance hurting mass margins since it has least income and highest margins.  
  • Overall EBITDA margins of low 30% target
  • They need 1,500 more laborers to build the Wynn Palace. They have put the request in. 

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