Wynn Resorts’ 3Q earnings missed expectations on a steep drop in revenue from its Macau operations with income from the high-roller segment falling by half.
The operator said net revenues for the quarter were $996.3 million, down from $1.37 billion a year earlier and below forecasts for $1.03 billion. Net revenue in Macau was down 37.9 percent.
Adjusted property EBITDA was $279.9 million, down 39 percent, while adjusted earnings dropped to $87.6 million, or $0.86 per diluted share, missing estimates by a penny.
The news sent the shares down as much as 3 percent in after hours trading.
In Macau net revenues were $585.1 million, down from $942.3 million a year earlier, while adjusted property EBITDA tumbled by half to $162.8 million.
Table games turnover in the VIP segment was $12.2 billion, a 51.3 percent decrease, though the number of VIP tables also declined during the period to 228 units from 251 in the prior year’s period.
Wynn said that its results had also been affected by a higher-than-expected win rate of 3.17 percent, outside the expected range of 2.7 percent to 3 percent.
However, on a later conference call CEO Steve Wynn expressed concern over the impact of government policy on operations in Macau.
“It’s become a major issue in Macau … the impact of government policy in planning … None of us are really clear as to what our environment will be going forward. It makes planning and adjusting almost a mystical process,” he was cited as saying in media reports.
Wynn went on to criticize the government’s table allocation policy, saying it was “preposterous” that Melco Crown Entertainment still doesn’t know how many tables it will have just weeks before opening its multi-billion dollar Studio City property.
The company will pay a dividend of $0.50 per common share.
Commenting on its new Cotai property, Wynn said it expects to open the resort in the first half of 2016.
During the third quarter of 2015, it invested approximately $434.9 million in the Cotai project, taking the total investment to $3.1 billion through September 30, 2015.
Wynn was the second of the Macau majors to report earnings, with Galaxy Entertainment posting in line results earlier Thursday.
Galaxy Entertainment Group posted revenue of $12.3 billion and adjusted EBITDA of $2.1 billion in 15Q3, year-on-year declines of 29 percent and 36 percent respectively.
Shares in Galaxy jumped 11 percent to close at HK$29.10, the biggest gain since July 2, as investors cheered a sequential improvement in quarterly performance.