Wynn Resorts Ltd Sinks To $204.3 Million Loss in Q1

Wynn Resorts Ltd has reported a $204.3 million loss for the first quarter of 2018, with the success of the company’s Las Vegas and Macau operations having been offset by a one-off settlement payment of $463.6 million related to longstanding litigation with Universal Entertainment and Aruze USA.
Litigation Costs
Despite the casino resort developer and operator seeing its operating profits rise by 20.5% to $1.42 billion versus Q1 of 2017, Wynn Resorts still returned a loss overall for the period. In addition to the aforementioned legal case, the brand’s reputation was also harmed this year by sexual misconduct allegations levied against its former CEO Steve Wynn, but commenting upon the situation the company’s present chief executive, Matt Maddox, said that he is “not interested in looking in the rearview mirror,” and that Wynn Resorts’ future prospects remained as bright as ever.
“There’s just been an onslaught of negativity from the media [but] we are very strong, and the future is stronger than the past, no matter what the media like to say,” explained Maddox.
Las Vegas and Macau
Wynn Resorts owns a number of properties in Las Vegas (Wynn Las Vegas, Encore at Wynn Las Vegas), and Macau (Wynn Macau Resort, Encore at Wynn Macau, Wynn Palace), with Wynn Palace and Wynn Macau responsible for 95% of the revenue increase posted, having generated $213.5 million and $65.5 million respectively.
For the first three months of 2018, Wynn’s Las Vegas operations reported a 3% rise in operating revenues to $431.5 million, with EBITDA up by 6% to $142.6 million. Wynn Macau, on the other hand, saw its revenues grow by 11% to $618.2 million compared to the $552.7 million collected in Q1 of 2017, with revenues soaring by 47% at Wynn Palace on the Cotai Strip, and by 11.9% at Wynn Macau, with the latter’s lower growth rate mostly due to VIP clients enjoying better luck at the tables.
In terms of casino revenue, Wynn Macau saw its business increase by 10.5% to $539 million compared to Q1 2917, while Wynn Palace reported an impressive 50% gain to $568.5 million, year-on-year.
Non-Gaming Revenues
Wynn Palace’s biggest gains were noted away from the gaming floor in Q1, with non-gambling revenue jumping by 29.5% to $97.4 million, and Wynn Macau also posting a 22.3% increase to $79.2 million. The non-gaming results has provided further encouragement for the company to beef up its hotel and restaurant investments, and according to Maddox, $100 million will be spent upgrading the Wynn Macau, including building two new restaurants, and remodeling its Encore rooms.
A number of improvements will also be made to Wynn Palace, such as developing two new restaurants, and turning 11 acres of spare land opposite the property to productive use. Furthermore, Wynn said that it was open to collaborating with the Galaxy Entertainment Group on this project, as well as others around the world. In March, Galaxy bought a 4.9% stake in Wynn Resorts, and as Maddox explains:
“I think that as international jurisdictions open up we could potentially work together to jointly examine those. We certainly haven’t made any agreements to do that, but our operating styles and philosophies are very similar and it’s something that could potentially be a value to both companies in the future.”
Wynn Stocks Tumble
Despite the increased investments, CEO Matt Maddox said that the company would also be scaling back on some other projects originally started by his predecessor, Steve Wynn, including plans to spend more than $3 billion on two Las Vegas resorts — Paradise Park and Wynn West.
The announcement subsequently caused Wynn’s stock to fall by 5.7% to $179.22 last Wednesday, marking their biggest decline since the Steve Wynn scandal broke three months ago. As of today, though, the stock price have risen to $186.15, giving the firm a market cap of $20.13 billion.