Wynn Resorts executives revealed that the company has approved $1 billion (£770.2 million/ €918 million) in stock buybacks and shared that construction on its United Arab Emirates (UAE) project is on pace.
On its third-quarter earnings call, Wynn CEO Craig Billings led with the buyback, saying that it shows how the company’s ongoing “enthusiasm” about its finances. He went on to say that the buyback programme shows the company’s “continued commitment to prudently return capital to shareholders”.
Winners of the first casino licence in the UAE, Billings said that as of this week, 24 floors of the Al Marjan hotel tower have been completed. He projects the country will be a “$3 billion-$5 billion gaming market“. And Wynn, also so far the only casino company to be awarded a licence, will be at the forefront. To date, Billings said, 3.6 million square feet of concrete and steel are in place.
UAE is “certainly the most exciting new market for our industry in decades,” Billings said. “I remain incredibly bullish about the future of our company. We have the best assets in the world’s premier gaming markets and our team is the most dedicated team in the business.
“We are investing for long-term growth with an exciting high ROI development in well under way, which is unique in our industry.”
During the third quarter, Wynn put $18.2 million of equity to the Marjan Island project. It has now increased its total contribution to $532.6 million in total equity.
“Luxury positioning” a key driver
Overall, the company’s third-quarter revenue of $1.69 billion and $32.1 million net loss missed Wall Street projections. Billings pointed to a downturn in the Las Vegas casino business, while Deutsche Bank noted Macau revenue fell $27 million below its estimates. Wynn stock dropped 2.8% in after-hours trading.
But Billings pointed to strong third-quarter growth across the world, despite US properties showing the least amount of year-over-year improvement. While he said that “demand remained strong” in Nevada, revenue there was up about 1% and EBITDA was flat “year over year on very tough comps”.
The company did see hotel revenue rise by 5% and slot handle grow by 4%. Despite potential general economic headwinds in the US, Billings pointed to Wynn’s client base as a strength.
“Our luxury positioning and unique programming continue to appeal to the market’s most affluent and therefore most resilient customers,” he said.
The numbers were essentially the same for Wynn’s Boston Encore property where EBITDAR was up 4% to $63 million against the third quarter of 2023. Slot handle grew by 3%, non-gaming revenue was up 2% and slot handle rose 1%.
While much of Wynn’s worldwide focus is on the UAE, it is also diversifying and growing its Macau business.
Wynn eyes non-gaming improvements in Macau
From a financial perspective, that market was the strongest for the third quarter – EBITDA was up 3% while revenue grew 6% and combined mass table and slot win was up 10%. However with operating revenue from Wynn Palace falling 1% to $519.8m and Wynn Macau’s contribution up 19.3% to $352m, revenue from the Special Administrative Region came in $20m below Wall Street’s consensus.
Headwinds stemmed from hotel and retail, Deutsche Bank’s Carlo Santarelli noted, with aggregate non-casino revenue down 8% year-over-year.
In the broader picture, Wynn is expanding its non-gaming offerings in Macau. Billings said the company has upgraded four dining venues at the property and is in the process of “revitalising and expanding the Chairman’s Club, our most exclusive gaming area at Wynn Macau.”
Santarelli said amid stiff competition in Macau, Wynn Macau’s market share would only improve once these new amenities launch during 2025.
“Given sluggish non-gaming trends and annual cost increases, our Macau revisions are somewhat material, but we think capture a largely static environment and, as such, could be conservative,” he wrote in an analyst note.
Debt reduction = $70m in savings
Billings also shared that Golden Week, which ran from 1-7 October, was a boon for the company. Mass table drop was up 30% against Golden Week in 2023. The company is also continuing work on an event centre and production show.
In the bigger financial picture, Wynn has significantly reduced its debt and in turn will save $70 million annually in interest payments, according to CFO Julie Cameron-Doe.
The company had $3.5 billion available in cash and revolver availability as of 30 September. Of that, $1.7 billion in liquidity is available in the US and $1.8 billion in Macau. The company reduced gross debt by $1.2 billion during early October. The board approved a $0.25 cash dividend for those holding stock as of 15 November.
Both Billings and Cameron-Doe reiterated a positive outlook for 2025 as the company continues to invest in upgrades across its properties.
