Wynn Macau Limited, the Asian arm of Wynn Resorts Ltd, saw a 26.6% decline in year-on-year profits for the fourth quarter of 2016, according to a recently posted financial report from the company. The drop in profits is reportedly due to costs associated with the launch of the Wynn Palace casino in Cotai, which took place this August amidst a grand opening ceremony.
During Q4 of 2016, Wynn Macau saw a profit of $46.6 million, a substantial decline when compared to last year’s performance, when the company generated $63.5 million in Q4 profits. While profit suffered, operating revenue increased by nearly two-thirds. Fourth-quarter operating revenue last year reached $555.7 million, while this year Wynn Macau saw a 65.1% increase which generated $917.1 million. This also lead to an increase in operating profit, which jumped by 7.5% year-on-year and reached $86.1 million in Q4 of 2016.
According to the financial report, the newly opened Wynn Place performed slightly less brilliantly than what was expected by the company. Namely, the Cotai casino had a VIP table game win rate of 2.68% percent (calculated by turnover percentage before commissions), just short of the 2.7% to 3% the company expected. The mass table game win, on the other hand, reached 22%, or $159.6 million. The total adjusted EBITDA property earnings for the Cotai resort for 2016 was $77.5 million, while the net revenue generated $418.7 million.
In a conference regarding the Q4 performance, representatives from the Wynn Resorts International and Wynn Macau stated that their plans to get the Wynn Palace off to a flying start is experiencing difficulties due to “circumstances” around the property, rather than inside it. As Wynn Resorts CEO Steve Wynn put it, the company has an “anomalous situation” that saw all sides of their resort enclosed by various construction blockades, one of which is for the new MGM Cotai Casino that is scheduled to open in the second quarter of 2017.