Wynn Macau Generates Adjusted EBITDA of $58.5 Million in the Fourth Quarter and $60.8 Million in the 117 Days since Its September 6, 2006 Opening. It successfully opened Wynn Macau on time and on budget on September 6, 2006 and continued construction of Phase II of Wynn Macau, which is expected to open in the third quarter of 2007.
Net revenues for the fourth quarter of 2006 were $563.6 million, compared to $269.4 million in the fourth quarter of 2005. Results for this quarter include a full quarter of operations for Wynn Macau, which opened on September 6, 2006. Net revenues for 2006 were $1.4 billion, a 98.5% increase over 2005. The revenue increase was driven primarily by the opening of Wynn Macau in 2006 and a full year of operations for Wynn Las Vegas (versus 248 days in 2005).
Wynn Macau Fourth Quarter Results
The first phase of Wynn Macau opened on September 6, 2006 with 220 tables, 380 slot machines and 600 hotel rooms. In the fourth quarter of 2006, Wynn Macau generated net revenues (after discounts and commissions) of $248.7 million and Adjusted EBITDA of $58.5 million.
Table games results in Macau are segregated into two distinct reporting categories, the mass market segment and the VIP segment.
Table games drop in the mass market category was approximately $513.8 million during the period. Mass market table games win percentage (calculated before discounts and incentives) was 17.5%, which is at the lower end of the expected range of 17% to 19%.
Table games turnover in the VIP segment was $6.6 billion for the period. VIP table games win percentage (calculated before discounts and commissions) was 2.6%, which is within the expected range of 2.5% to 2.8%.
Slot machine win per unit per day was $418 on handle (volume) of $274.4 million for the quarter.
For the quarter, Wynn Macau generated an average daily room rate (ADR) of $248, with occupancy averaging 81.9%. Net non-casino revenues, consisting of rooms, food and beverage, retail and other, were $23.8 million.
Wynn Macau Expansion
In February 2007, we added additional table games and slot machines bringing the current total to approximately 256 table games and approximately 477 slot machines in an approximately 110,000 square foot casino. Construction on the second phase is progressing as planned and is expected to open in the third quarter of 2007. This second phase includes approximately 123,000 square feet of additional gaming space, a dramatic front feature attraction and additional food, beverage, a theater showroom and retail amenities. After the completion of this expansion, Wynn Macau is expected to have a total of approximately 420 table games and 1,280 slot machines.
In addition, we continue to develop the plans and budget for Wynn Diamond Suites, a further expansion of Wynn Macau, which was first announced in November 2006. This further expansion is expected to add a second self-contained, fully-integrated resort as well as food and beverage, retail and entertainment amenities. We continue to work on a budget and final design for Wynn Diamond Suites.
As of December 31, 2006, we have incurred approximately $877.1 million of a total project budget (excluding Wynn Diamond Suites) of approximately $1.2 billion.
The Company has submitted an application to the Macau government for a concession of land in Cotai for future development. The Company recently reconfigured its site plans for 52 acres and is waiting final approval.
Other Factors Affecting Earnings
Interest expense, net of $5.8 million in capitalized interest, was $39.8 million for the fourth quarter of 2006. For the full year 2006, interest expense was $148.0 million, net of $29.5 million in capitalized interest. Depreciation and amortization expenses were $50.7 million during the quarter. For the full year, depreciation and amortization expenses were $175.5 million and pre-opening expenses were $62.7 million. Corporate expense was $18.9 million in the fourth quarter, and $54.4 million for the full year 2006, including $3.8 million and $15.4 million, respectively, in stock based compensation.
Wynn Macau completed the sale of a subconcession right to Publishing & Broadcasting, Limited for $900 million in cash, received on September 11, 2006. The one time gain on the sale substantially increased net income for the quarter ended September 30, 2006 and for the fiscal year ended 2006.
Billionaire company owner Steve Wynn was effusive about the growth of gambling in Macau and Las Vegas during conference call Tuesday with investors and analysts.
“As much attention as the investment community has paid to Macau, it’s hard to verbalize it without sounding hyperbolic,” he said.
Full Press Release | Wynn Resorts