Inside Asian Gaming

REGIONAL BRIEFS Macau Lifts Wynn to Banner Q4 Wynn Macau’s earnings surged 32% in the fourth quarter on a 25% increase in net revenue to US$1.12 billion. The announcement accompanying parent Wynn Resorts’ results showed adjusted earnings before interest, taxes, depreciation and amortization at $374.2million, up from$283.2million in the year-ago period, beating the consensus of 10 analysts polled by Bloomberg, as the casino drew more big-spending cash players. Wynn Macau (HK:1128) “gained mass-market share as it converted 12 to 13 VIP gaming tables tomass inmid-October,”wrote Deutsche Bank analyst Karen Tang. The lucrative segment could grow further this year after the company renovates its second hotel tower, said Morgan Stanley analyst Praveen Choudhary. The company also is expanding onto the booming Cotai resort district with the $4 billion Wynn Palace scheduled to open in early 2016. The Macau subsidiary was the biggest driver of corporate earnings in the quarter. Net income for Wynn Resorts (Nasdaq: WYNN) nearly doubled to $213.9 million, or $2.10 per share, from $111.4 million ($1.10/share) in Q4 2012, on an 18% increase in revenue to $1.52 billion, of which $400 million was generated by the company’s two resorts on the Las Vegas Strip. For the year, net revenues were $5.62 billion, up 9.1% over 2012. Adjusted property EBITDA grew 14.9% for a record $1.81 billion, driven principally by a record performance at Wynn Macau, where adjusted EBITDA rose 13.4% to $1.32 billion. Sands’ Q4 Top Line: $3.66 Billion Net income surged 33% for Las Vegas Sands in the fourth quarter as the company continued to ride high on the Macau boom and also grew revenues on the Las Vegas Strip. NYSE-listed Sands reported a profit of US$577.5 million, or 70 cents a share, up from $434.8 million, or 53 cents a share, a year earlier. Adjusted for early debt retirement costs and development expenses, it worked out to 72 cents a share, compared with 54 cents in Q4 2012. Revenue company-wide was up 19% to $3.66 billion, driven by a 21% increase on the gaming side. Hotel and food and beverage also contributed significantly. Las Vegas’ top line jumped 25%. Operating income grew to $886.1 million, compared with $672 million a year ago, mostly due to stronger results in Macau. The company’s Macau subsidiary, Hong Kong-listed Sands China (1928), saw net income soar by 40% year on year on a 28% increase in net revenue. Net revenue from the company’s Marina Bay Sands resort in Singapore slid 8%. Immigration by Smart Card Coming to Macau The Chinese government is preparing to install technology at the border crossings with Macau that will let travelers on the Individual Visit Scheme use a smart card to participate in the e-channel immigration program coming in and going out. A Macau delegate to the National People’s Congress told Portuguese-language broadcaster TDM News about the plan, which will let cardholders bypass the queues under the current manual paper system and dramatically speed up entry and exit. Beijing has named Guangdong as the first province eligible to replace the current travel permit booklet system. The new system is expected to be operational imminently. Timing will depend on technological coordination with the Macau side, according to investment analysts Union Gaming Research Macau, which reported on the plan in a note to clients. Time also will be a factor if visa holders wait until their existing papers expire to switch over, which is likely, the firm said. Still, it comes as “very good news,” UGRM said, and not only because it will get visitors through immigration and into the city faster. “Guangdong represents the largest share of total mainland visitors, and represents an even higher share of IVS visitors,” the firm said. “In our view, IVS visitors are a much higher quality visitor from a GGR perspective than non-IVS visitors. As such, we view a smart card system as very beneficial to Macau, especially as it seems that IVS visitation is likely to increase at a much faster rate than non-IVS visitation.” UGRM believes the cards will be made available to residents of other provinces eventually.“The systemwill ultimately be applicable to all IVS holders (if not all Chinese visitors, including those with tour group visas).” INSIDE ASIAN GAMING | December 2013 42 Wynn Macau