Reported all-time record property EBITDAR of $647 million for Q1 2024.
Wynn Las Vegas achieved a first quarter record with $246 million of adjusted property EBITDAR, up 6% year-on-year.
Encore Boston generated $63 million of EBITDAR during the quarter, with stable EBITDAR and revenue year-on-year despite challenges.
Macau operations generated $340 million of EBITDAR in the quarter, with market share above Q4 2023 and 2019 exit.
The company’s global cash and revolver availability stood at nearly $4.2 billion as of March 31.
Reduced company-wide gross debt by approximately $1 billion over the past 4 quarters.
Declared a cash dividend of $0.25 per share payable on May 31, 2024.
Operational Updates
Las Vegas operations saw strong performance across non-gaming businesses with 16% revenue growth year-on-year.
Development across from Encore Boston Harbor has been put on hold due to financial term disagreements with local authorities.
Initial demolition and construction work started on a second concession-related project in Macau.
Construction on Wynn Al Marjan in the UAE is advancing, with the hotel tower reaching the fourth floor.
Considering greenfield development opportunities in New York City and potentially Thailand.
Macau and International Expansion
Macau’s EBITDAR would have been approximately $320 million on a fully normalized basis.
Strong performance continued into Q2 with mass drop per day in April increasing 30% versus April 2019.
Development projects in Macau include a destination food hall, an events and entertainment center, and a unique theater and showroom.
CapEx related to Macau concession commitments expected to range between $350 million and $500 million between 2024 and end of 2025.
Financial Strategies and Dividends
Issued a $400 million add-on to Wynn Resorts Finance 2031 unsecured notes to fund the tender and repurchase of $800 million of Wynn Las Vegas notes maturing in March 2025.
The Board approved a cash dividend of $0.25 per share for Q1 2024.
Wynn Macau Board recommended reinstating a dividend at $0.075 per share, or USD 50 million.
Capital Expenditure and Investments
Q1 CapEx was $97.7 million, primarily related to renovations and enhancements at Wynn Las Vegas, concession-related CapEx in Macau, and maintenance across the business.
Contributed $70 million of equity to the Wynn Al Marjan Island JV project during the quarter, totaling approximately $160 million to date.
Question and Answer
Macau Market and Competitive Landscape
Question
How would you characterize the current competitive landscape in Macau compared to previous quarters?
Answer
Macau is a competitive market, and Wynn focuses on product and service quality to attract the best guests.
While there are questions about promotional activity, Wynn’s competitive strength lies in its product and service offerings, as demonstrated by Q1 results and margins.
Las Vegas Market and Future Performance
Question
How do you anticipate the tough comp stack in Las Vegas impacting future performance, considering the strong results in February and continued positive trends in April?
Answer
While acknowledging that comps are getting tougher, the strength of Wynn’s offerings in Las Vegas, including service quality and amenities, contributes to its pricing power.
The target customer base has seen strong wealth creation, and the EBITDA setup is favorable due to the majority of deployed capital and debt being in “yesterday’s dollars.”
The company remains optimistic about current performance, but acknowledges the need to monitor trends and comp comparisons.
Macau Gross Gaming Revenue and Casino Revenue Conversion
Question
What factors contributed to the sequential improvement in the conversion of gross gaming revenue to casino revenue in Macau, and is it indicative of a systemic change in reinvestment?
Answer
The primary driver of the sequential improvement is the revamp of Wynn’s loyalty program, which offers customers choice in how they want their reinvestment allocated.
This allocation can vary quarter by quarter, impacting the flow of funds to contra revenue or operating expenses, but it is not indicative of a systemic change in aggregate reinvestment.
Macau Operating Expenses Trajectory
Question
As the Macau market normalizes, what is the expected trajectory for underlying core expense growth or inflation, and how might it level off in the back half of the year?
Answer
Wynn has been disciplined in managing operating expenses, with Q1 OpEx per day well below Q1 2019 levels and only a 3% sequential increase.
The company will continue to be disciplined in OpEx management, considering the events calendar and revenue mix as key drivers of margins going forward.
Las Vegas Market and Consumer Behavior
Question
Have you observed any areas of skittishness or potential normalization in consumer behavior, particularly regarding potential leisure pushback at the high end?
Answer
Wynn has not observed any areas of skittishness in Las Vegas.
The company believes that the current industry dynamics, including the deployment of capital by competitors and the overall market demand, support its pricing power and performance.
Booking windows have returned to normal, and the company is experiencing strong pace in group bookings and across all channels.
Las Vegas Property Occupancy and Rate Balancing
Question
Is there a structural reason why Las Vegas property occupancy couldn’t go higher, considering the high rate and modest rate increases?
Answer
Wynn aims to balance occupancy and rate to avoid walking guests due to room availability and to maintain a great on-property experience.
In Macau, the dynamics allow for higher occupancy due to in-market demand and the ability to offer rooms to individuals already present.
While Las Vegas occupancy could be pushed higher at times, the company prioritizes optimizing revenue while ensuring a positive guest experience.
Thailand Market Opportunity and Development
Question
Can you provide more details on the potential opportunity in Thailand, such as timing, project size, and the level of competition expected in the bidding process?
Answer
It is early days for the Thailand market, and Wynn’s further involvement is contingent on understanding the regulatory and licensing structure, which the company believes will be consistent with best-in-class jurisdictions.
The market is expected to be competitive, but Wynn is confident in its capabilities and is actively considering the opportunity.
Al Marjan Project Budget and Construction Progress
Question
Can you remind us of the total capital contribution and budget for the Al Marjan project, and if there have been any changes since the updated renderings were released?
Answer
The total budget for the Al Marjan project is around $4 billion, with Wynn’s capital contribution estimated at approximately $900 million, depending on construction leverage.
Las Vegas Property Performance by Month
Question
Can you provide more details on the performance of the Las Vegas property by month, specifically regarding January and March, and any additional color on the strong April results?
Answer
February was the strongest month of the quarter, followed by March and January in rank order.
Al Marjan Project Regulatory Approval and Construction
Question
Are there any specific regulatory approvals required for the Al Marjan project beyond the standard licensing process, and can construction be completed before the casino can start operating?
Answer
As with other jurisdictions, there are regulatory requirements that must be met before the casino can open.
Wynn expects to meet these requirements and receive the necessary approvals in due course.
The company is aware of the ongoing activities of the GCGRA and is aligned with the regulatory framework.
Macau Property Mass Hold Variability
Question
Do you anticipate more normalized variability in mass hold at the Wynn Macau property, given the current gaming volumes, or are there other factors at play?
Answer
Hold has been high following the end of the quarter, but it is primarily a function of the normal ebb and flow of the game, particularly related to the volume of high-end play.
Las Vegas Development Opportunities and Considerations
Question
Under what circumstances would you consider developing the excess land in Las Vegas, and what factors would influence that decision?
Answer
Wynn has a substantial land bank in Las Vegas but is currently prioritizing other development opportunities, including projects in the UAE, New York, and potentially Thailand.
The company is focused on its current development pipeline and future EBITDAR and free cash flow profile, but remains open to considering Las Vegas land development in the future.
