Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Wynn Resorts Ltd (WYNN, Financial) reported all-time record property EBITDAR of $647 million in Q1 2024, demonstrating strong business momentum.
- Wynn Las Vegas achieved a first quarter record with $246 million of adjusted property EBITDAR, up 6% year-on-year.
- Encore Boston showed resilience with $63 million of EBITDAR despite poor weather and inflationary pressures, with record slot handle and strong hotel revenue growth.
- In Macau, Wynn Resorts Ltd (WYNN) generated $340 million of EBITDAR, with mass drop per day in April increasing 30% versus April 2019.
- The construction of Wynn Al Marjan in the UAE is progressing well, with significant advances expected to be reported later in the year.
Negative Points
- Development across from Encore Boston Harbor has been put on hold due to failure to reach an agreement with local authorities on financial terms.
- The competitive landscape in Macau remains intense, requiring continuous innovation and investment to maintain market share.
- Operational expenses in Macau, although well managed, showed a sequential increase of 3%, indicating potential pressure on margins if not offset by revenue growth.
- The regulatory and licensing structures in potential new markets like Thailand are still unclear, posing risks to future expansion plans.
- While the company is exploring development opportunities in New York City and potentially Thailand, these are subject to regulatory approvals and market conditions that could affect their viability.
Q & A Highlights
Q: Craig, could you characterize the competitive landscape in Macau now compared to last quarter?
A: Craig Scott Billings - CEO & Director, Wynn Resorts: Macau remains a competitive market. Our focus is on product and service to attract the best guests. Our competitive strength lies in our product and service, evident from our Q1 results and margins.
Q: Can you discuss the sequential improvement in the conversion of gross gaming revenues to casino revenues in Macau?
A: Craig Scott Billings - CEO & Director, Wynn Resorts: The improvement is largely due to the revamp of our loyalty program, giving customers choices in their reinvestment, affecting either contra revenue or OpEx. This isn't indicative of a systemic change in overall reinvestment.
Q: Regarding the Macau OpEx trajectory, how do you see expenses normalizing in the back half of the year?
A: Julie Mireille Cameron-Doe - CFO, Wynn Resorts: We've been disciplined with OpEx, managing it well below 2019 levels. We expect to maintain this discipline, with potential slight variations based on quarterly events and programming.
Q: How do you foresee handling the tough comps in Las Vegas as the year progresses?
A: Craig Scott Billings - CEO & Director, Wynn Resorts: Despite tougher comps, our pricing power remains strong, driven by our high-quality service and offerings. The current economic environment, with its high interest rates, supports strong EBITDA and discretionary free cash flow.
Q: Could you provide an update on the Al Marjan project in terms of regulatory approvals and construction progress?
A: Craig Scott Billings - CEO & Director, Wynn Resorts: The total budget for Al Marjan is around $4 billion, with our capital contribution estimated at $900 million. We are progressing with construction and expect to meet all regulatory requirements for operation.
Q: What would need to happen for Wynn to consider developing its excess land in Las Vegas?
A: Craig Scott Billings - CEO & Director, Wynn Resorts: Development decisions depend on various factors including macroeconomic conditions, borrowing costs, and other opportunities. Our current focus is on projects in the UAE, New York, and monitoring the situation in Thailand.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
