Casino operator Wynn Macau Limited has released its interim financial results for the first six months of 2016 showing a 20.6% drop year-on-year in net profit to $147.15 million alongside a 5.5% decrease in total revenues to $1.24 billion.
The operator of the Wynn Resort Casino Macau alongside the Encore At Wynn Macau integrated resort hotel, Wynn Macau Limited stated that the declines were “primarily due to lower gaming volume in [its] VIP casino and general casino”.
A subsidiary of Las Vegas-based Wynne Resorts Limited and set to open the doors to its $4.2 billion Wynn Palace Cotai development from today, the Hong Kong-listed firm revealed that casino revenues for the six-month period to the end of June fell by 4.9% year-on-year to $1.18 billion with VIP gross table games win down 8.3% to $851.16 million. Similarly, table game win from the mass-market segment dropped 1% to $477.2 million while slot win experienced a 15.3% slump to $82.96 million.
Despite only a 0.03% slump year-on-year in adjusted earnings before interest, tax, depreciation and amortization for the half to $328.59 million, Wynn Macau Limited explained that its net debt was now 11.7% higher at $4.52 billion.
“The levels of tourism and overall gaming activities in Macau are key drivers of our business,” read a statement from Wynn Macau Limited. “Both the Macau gaming market and visitation to Macau have grown significantly leading up to 2014. However, beginning in 2014, the Macau gaming market experienced its first year-over-year decline in annual gaming revenues since its liberalization in 2002. Commencing from the fourth quarter of 2014, tourist arrivals to Macau had experienced a downward trend. Statistics show a slight year-over-year increase of 0.1% with 14.8 million tourist arrivals to Macau during the six months [to the end of June]. However, the decline in tourists’ spending habits and gaming activities have continually contributed to the further reduction in gaming revenues in Macau for the six months [to the end of June] despite the slight increase in tourist arrivals to Macau.”
Wynn Macau Limited revealed that it will not be declaring or paying an interim dividend for the six-month period with earnings per share now worth just over 21% less at HK$0.22.
“A significant number of our gaming customers at Wynn Macau come from mainland China,” read the statement from Wynn Macau Limited. “Any economic contraction or uncertainty in China would impact the number of patrons visiting our property and the amount they may be willing to spend. In addition, policies adopted from time to time by the Chinese government including any travel restrictions imposed by China on its citizens such as restrictions imposed on exit visas granted to residents of mainland China for travel to Macau could affect the number of visitors from mainland China to our property.
“Furthermore, the Chinese government’s ongoing anti-corruption campaign has influenced the behavior of Chinese consumers and their spending patterns both domestically and abroad. The campaign has specifically led to tighter monetary transfer regulations including real-time monitoring of certain financial channels, which has affected and may continue to impact the number of visitors and the amount of money they bring from mainland China to Macau. The overall effect of the campaign and monetary transfer restrictions may continue to impact Macau or result in an even greater decline in visitation and may continue to negatively affect our revenues and results of operations.”