Inside Asian Gaming

November 2012 | INSIDE ASIAN GAMING 45 international airport in the capital of Phnom Penh to cope with increasing visitation. Wynn’s Revenue Up in Vegas, Down in Macau Wynn Resorts announced its profit in the third quarter of 2012 fell almost 12% year on year as a debt-related charge increased expenses. The company said net income for the third quarter was US$112 million, or $1.11 per share, compared with $127.1 million, or $1.01 per share, for the same period last year. Excluding the loss on the extinguishment of debt and other one-time items, the Las Vegas- based company earned $149.2 million, or $1.48 a share. Per-share profit has benefited from a drop in shares outstanding. Earlier this year, the company seized 24.5 million shares held by co- founder Kazuo Okada. Revenue of US$1.3 billion was in line with analysts’ expectations. Las Vegas revenue rose 11.8% to $388 million. Net casinos revenues atWynn Las Vegas and Encore were $155.6million, up 22.6% from the third quarter last year. Room revenues were up 1.4% to $91 million compared to $89.7 million last year. But revenue in Macau, which accounted for 72% of sales last year, fell 4.3% to $910.5 million, and operating profit as measured by earnings before interest, taxes, depreciation and amortization fell 1.3% to $292.2 million. The company announced a US$8 a share special cash dividend in addition to a regular dividend of 50 cents. The company said it plans to double the regular dividend to $1 next year. Caesars Packing Up its Clubs Caesars Entertainment wants to sell the golf course it owns in Cotai in order to pull out of Macau, The Wall Street Journal reports. In 2007, Caesars paid US$577.7 million for the Macau Orient Golf Course, located on 175 acres of reclaimed land. Later rebranded Caesars Golf Macau, the purchase was widely seen as a means for the Las Vegas-based casino giant to try to enter Macau’s booming gaming market, though that never transpired. The golf course, meanwhile, has operated at a loss. “When you have that much capital devoted to an asset that’s not delivering its potential, you need to consider other options,” said StevenTight, the company’s president of International Development, in an interview with the Journal . Mr Tight said Caesars does not have yet formal offers for the golf Briefs course but there “has been a significant level of interest in the land from a number of potential buyers.” Caesars Chief Executive Gary Loveman said last month that the company is unlikely to obtain a Macau casino license. Mass Market Shines for Melco Crown Melco Crown Entertainment reported results for the third quarter, with net revenues down 4% year on year to US$1.01 billion and earnings before interest, tax, depreciation and amortization falling 6% to $226 million. After adjusting for a positive luck factor in the quarter, EBITDA would have been about $210 million. Union Gaming Research Macau’s Grant Govertsen wrote: “We continue to like shares of MPEL given the company’s exposure to Cotai, which should enable it to outperform market growth over the next three years. We also expect the company to outperform with respect to the high-margin mass tables and slots business, again due to its presence on Cotai and the continued ramping of this segment at its City of Dreams property.” Combined VIP volume at Altira and CoD was down 9% year on year to $30.5 billion. Mr Govertsen noted: “The decline is broadly in line with system- wide declines reported by most of the same-store peer group. … Looking ahead, we continue to expect Altira to underperform relative to both the market as a whole and relative to its sister property CoD as play generally migrates internally to CoD. At CoD, we expect a roughly flat 4Q12 in terms of VIP volume on a year-on- year basis. Echoing other recent feedback we’ve recently received, MPEL management remains encouraged by current market trends and on 2013 in general in a post-leadership-change environment.” Mass-market tables, driven especially by premium mass at CoD, continue to drive earnings growth for MPEL. During the third quarter, system-wide mass table drop was up 18% year on year. The hold rate of 25.7% was up 190 basis points year on year, resulting in a nearly 26% increase in mass table revenue. The company’s slots segment includes operations at CoD as well as its Mocha slot parlors located throughout Macau. Gross gaming revenue from this segment increased 12% year on year to $73 million in the third quarter. This included 13% growth at Mocha and 10% growth at CoD. Caesars Golf Macau Altira Macau