Wynn Resorts has declared an all-time record, as well as a new fourth-quarter high for its Las Vegas operations in its latest financial report, and it is “excited” about what the operation can achieve in 2023.
Speaking on the operator’s Q4 earnings call, CEO Craig Billings said the new records were achieved by the team in Vegas focusing on what they do best, adding that such strength has already continued into the first quarter of the new year.
The group’s Encore Boston Harbor property had a record Q4 too as it prepared to open its retail sportsbook for the launch of in-person sports betting in Massachusetts at the end of January, which is also performing well so far.
However, Wynn did see a decrease in its overall operating revenues in Q4 following declines in its Macau properties and Wynn Interactive division compared to the previous year.
Wynn Q4 & 2022 financials
Publishing its Q4 results, Wynn declared an overall operating revenue of $1bn, a decrease of $48.2m from the $1.05bn reported in Q4 2021, as Macau properties and its interactive division impacted gains in Boston and Vegas.
Net income attributable to Wynn Resorts was $32.4m or $0.29 per diluted share (Q4 2021: net loss of $177.2m or $1.54 per diluted share), while adjusted property EBITDAR was $195.1m (2021: $149.1m).
Billings stated that the Vegas and Boston operations delivered a new fourth-quarter record for adjusted property EBITDAR at Wynn’s combined North American properties, generating a full-year figure of $1.04 billion – a new record “by a wide margin.”
“These impressive results are a testament to our team’s relentless focus on delivering five-star hospitality, which continues to elevate our properties above our peers as the destinations of choice for luxury guests in both Las Vegas and Massachusetts,” said the CEO.
For the full year, Wynn’s operating revenues were $3.76bn, flat compared to 2021.
Revenues improved over the year for the group across its Las Vegas, Encore Boston Harbor, and Wynn Interactive divisions by $628.5m, $139.6m, and $12.6m respectively, while Wynn Palace and Wynn Macau properties in Macau saw decreases of $472.7m and $314.8m respectively.
Net loss attributable to Wynn Resorts was $423.9m or $3.73 per diluted share for the year (2021: net loss of $755.8m, or $6.64 per diluted share), while adjusted net loss attributable was $507.4m or $4.47 per diluted share (2021: adjusted net loss of $695.8m or $6.12 per diluted share).
Adjusted property EBITDAR was $725.4m for the year (2021: $569.4m), increasing for the operator’s Las Vegas, Encore Boston Harbor, and Interactive operations by $270.2m, $33.3m, and $168.9m respectively, while falling at Wynn Palace and Macau operations by $188.2m and $128.3m respectively.
In terms of the balance sheet, Wynn declared its cash and cash equivalents totaled $3.65bn, and a total current and long-term debt outstanding of $12.12bn – $6.19bn Macau related debt, $3.14bn Wynn Las Vegas debt, $2.17bn Wynn Resorts Finance debt, and $613.5m of debt held by the retail joint venture which it consolidates.
During the quarter, Wynn also completed its Encore Boston Harbor transaction with Realty Income Corporation, selling the land and real estate of the property for $1.7bn.
Under the terms of the sale, Encore Boston Harbor will continue to be operated by Wynn Resorts via a triple net lease agreement with Realty Income, with the annual rent of the lease initially beginning at $100m for 30 years with an option for an additional 30-year renewal.
Wynn Resorts new highs & optimism
Overall operating revenue was impacted by the operator’s Wynn Palace and Wynn Macau properties in Macau, which fell by $80.9m and $54.5m respectively, while the Wynn Interactive division fell by $7.8m compared to the previous year.
Despite the declines, Billings noted that in Macau, he was “pleased to experience a meaningful return of visitation and demand during the recent Chinese New Year,” and that alongside being awarded a new 10-year gaming concession during the quarter, the company is “well-positioned for success in Macau’s next phase of growth.”
However, overall revenue was bolstered by the performance of Encore Boston Harbor and the group’s Las Vegas operations, with the latter delivering new records.
Operating revenues in Vegas were $585.5m, an increase of $91.6m YoY (2021: $493.9m), while adjusted property EBITDAR was $219.3m, a new Q4 high (2021: $186.2m). Table games win percentage in Q4 was 21.2%, below the property’s expected range of 22% to 26%, but above 2021’s 20.8%.
Billings commented during the earnings call: “Wynn Las Vegas just printed $816m of normalized adjusted property EBITDAR, $816m. I’m confident that this is an all-time record for a stand-alone Las Vegas Strip property.
“And mind you, we did not deliver this result by nickel and diming on service standards and reducing staff to drive operating leverage. The team did it by focusing on what we do best.
“Great products, great service, great programming, and it showed in our market share and pricing power. The Wynn Las Vegas team absolutely crushed it in 2022. Our business in Vegas is stronger and more relevant than it has ever been.”
The CEO added: “Our investment in people, facilities, and programming and our team’s deep sense of personal ownership of our business continue to drive growth. We continue to monitor economic trends and forward bookings at Wynn Las Vegas.
“We’re encouraged that the strength we have experienced over the past several quarters has continued into Q1. Similarly, our forward-looking indicators also remain quite strong despite well-known macro concerns as room bookings are pacing at or above pre-COVID-19 levels on substantially higher ADRs.”
Meanwhile, in Boston, operating revenues rose by $14.4m to $218.3m (2021: $204m) and adjusted property EBITDAR was $63.3m (2021: $68.2m). Table games win percentage was 21.9%, within the property’s expected range of 18% to 22% and below 2021’s 22.2%.
Following the end of the quarter, Wynn also launched its retail sportsbook at Encore Boston Harbor, with Billings during the earnings call that the operation averaged “a little over $0.5m a day in handle” during its first six days, 80% of the average daily handle at Wynn Las Vegas.
2023 Las Vegas outlook
Looking ahead, Wynn is very optimistic about its Las Vegas property in 2023, with the property’s President Brian Gullbrants stating that it could begin the year with a new record for Q1 operations while ending the year strong when the F1 race arrives in the city.
Gullbrants said: “I’m so excited about what we’ve got coming in ’23. When you look at it, we’ve got the best teams in the business. We’ve got the best assets in the business.
“In Vegas, we’ve got strong pace of group, particularly as we look forward into ’23 and then even beyond. Q1 may be a record for us. It’s just really done well. We have strong pricing power in every channel.
“We got a new show. We just launched with Awakening. We’ve got several projects coming in ’23 that are really exciting. And then we kind of kicked things at the end, up a notch with F1 in November.
“So our outlook for the year, pending no other macroeconomic impacts looks pretty good. We’re feeling pretty good about what we can see right now. So on the group side, very strong.”
