Wynn Resorts Ltd. plans to expand its newest property on Macau’s Cotai Strip after the project helped the company report better-than-expected earnings last quarter.
The next phase of the US$4.2 billion Wynn Palace, which opened in August 2016, will be developed on 11 acres (4.45 hectares), Chairman Steve Wynn said on a conference call.
According to Bloomberg he didn’t provide details of the plans.
“The depth and the foundational strength of that market is real,” Wynn said Monday. “We have been encouraged by the government in conversations with them to file our plans for Phase 2, which we’re working on now.”
Wynn Macau Ltd., the company’s Chinese subsidiary, reported stronger-than-expected results for the fourth quarter.
Property earnings before interest, taxes, depreciation and amortization totaled US$376 million, up 66 percent from a year earlier.
Shares of parent Wynn Resorts rose 8.7 percent to US$195.23 Monday in New York after the company reported sales and profit that topped analysts’ estimates. Surging revenue from the Wynn Palace overshadowed lower results in Las Vegas.
“Palace gained market share in both VIP and mass business, which should continue as Macau upcycle continues,” Morgan Stanley analysts led by Praveen K. Choudhary said in a note on Tuesday.
Phase 2 of Wynn’s new property “should continue to drive future growth.” The company’s market share in Macau expanded to 17.2 percent, ahead of Morgan Stanley’s forecast of 16.4 percent, according to the note.
On the conference call, Wynn also expressed his optimism on the business after the gaming licenses of Macau’s six operators start to expire from 2020.
“We enjoy a good deal of confidence and we have been given reason to have confidence that our businesses will continue after the initial concession expiration date,” he said.
Wynn Resorts’ earnings, excluding some items, almost tripled in the fourth quarter to US$144.3 million, or US$1.40 a share, the company said Monday in a statement.
Revenue grew 30 percent to US$1.69 billion, beating estimates of US$1.56 billion.
The company said it also benefited from the tax cuts that were enacted in the fourth quarter. The results reflect an estimated net tax benefit of about US$340 million, it said.