Wynn eyes phase two of Cotai
Wynn Palace – the new US$4 billion (31.95 billion patacas) Cotai resort being developed by entrepreneur Steve Wynn – will definitely be ready by Chinese New Year 2016 says the company.
But even as reportedly the last of the concrete is being poured into the foundations, Mr Wynn has already set his mind to developing phase two of his approximately 51-acre (20.6 hectare) Cotai site. Phase two will be known as Wynn Diamond.
He spoke about it on the latest earnings call for the parent company Wynn Resorts Ltd, covering the three months to September 30. He gave no indication however on whether he would be seeking separate quota from the Macau government for gaming tables to populate that second phase. New table allocation market-wide is subject to a cap equivalent to three percent compound growth annually until 2022, from a baseline of approximately 5,500 tables recorded by the local regulator in the fourth quarter of 2012.
Mr Wynn told analysts on the third quarter call: “…in our phase two we have [a] property that is going to be primarily massive non-casino, but [with] some casino development.”
A figure of 500 tables for Cotai was mentioned by Mr Wynn at a question and answer session with local media in June last year. Recent regulatory filings by Wynn Macau in Hong Kong haven’t mentioned specific table numbers.
Mr Wynn stated on the latest conference call that Wynn Diamond would include a 15,000-seat entertainment venue called ‘Wynn Diamond Coliseum’. Hotel rooms in the phase two property would be at least 1,300 square feet (121 sq. metres). The smallest at Wynn Palace will be 720 sq. ft.
The casino developer’s chairman had said in July that Leighton had promised an all-in price of US$4 billion for Wynn Palace. He hoped the facility would be open “in time for Chinese New Year,” 2016 – the Year of the Monkey – which starts on February 8 that calendar year.
Leighton will be entitled to “a big bonus” if it succeeds said Mr Wynn on the latest call. But if Leighton fails to meet “interim milestones” or “substantial completion” as per the contract, it faces maximum penalties of US$200 million said a Wynn Macau filing in July.
Michael Harvey, president of Wynn Design & Development Asia – who was hired to oversee the Cotai project – told analysts the first phase of Cotai would be ready on time. From 2004 until his current appointment in April 2011, Mr Harvey was project director for Leighton China State Joint Venture, and oversaw the construction and development of Wynn Macau on the peninsula. It opened in September 2006.
Wynn Macau boosts Q3 earnings by 13 pct
Analyst expects 10 pct compound growth in EBITDA over next 3 years
Wynn Macau Ltd posted a 13 percent increase in third-quarter earnings beating many analysts’ estimates.
Earnings before interest, taxation, depreciation and amortisation benefited from a high hold rate for baccarat – the game of choice for most Chinese – experienced at Wynn Macau during the quarter. It helped quarterly EBITDA to the tune of between US$10 million (79.86 million patacas) and US$15 million said Matt Maddox, chief financial officer of the parent company Wynn Resorts Ltd.
Adjusted property EBITDA rose to US$329.1 million from US$292.2 million a year earlier. That surpassed the US$300.6 million average estimate of 10 analysts surveyed by Bloomberg. Wynn Macau’s net revenue climbed 9.6 percent to US$997.6 million.
Wynn Macau will generate a compounded annual growth rate in EBITDA of 10 percent in the next three years, the smallest rate among all Macau casino operators, Philip Tulk, a Hong Kong-based analyst at Standard Chartered Bank, said in a research note dated October 15.
But Wynn Macau chairman Steve Wynn said during the latest earnings call that his firm wasn’t interested in “trying to bribe customers with credit to get them to come”.
Wynn Macau’s shares fell three percent to HK$29.35 in Hong Kong at Friday’s close. Wynn Macau has risen 40 percent this year, outperforming the 0.2 percent gain in the benchmark Hang Seng Index.