Wynn Macau's 3Q14 EBITDA beats expecations slightly with US$326mn

Management also admitted that October was tough.

Wynn Macau has reported 3Q14 property EBITDA of US$326mn (HK$2,532 mn), down 1% y/y and +6% q/q, though it has been also said that this was slightly better than expectations.

According to a research note from Barclays, group revenues were down 5.6% y/y and 1.9% q/q, while group EBITDA was US$289 mn, slightly ahead of Barclays' estimate by 3% and Bloomberg consensus by 5%.

Barclays also noted that Wynn Macau's management did highlight that October was more challenging.

Here's more from Barclays:

Peninsula property’s new gaming area on track: Management continues to guide for a January 2015 re-opening of the South side area of the Peninsula property for two new junket gaming areas.

Cotai property on track: Management said Wynn Palace on Cotai continues to be on schedule (early 2016 opening). On tables, management noted that their expectation of getting 552 tables is based on conversation with the government, although the government has full control in the end of how many tables are granted. In 3Q14, the company invested US$301mn in the Cotai project; total investment to date stands at US$1.4bn. Total project budget is at US$4.1 bn, slightly higher than previous quarter’s US$4.0bn, largely due to US$56mn of incremental payroll and other human resources related expense.

Challenging October: Management noted that October has been negatively impacted by: 1) the anti-corruption environment continues to impact high end players; 2) junkets remain cautious; 3) a very low hold rate at around 0.9% in certain weeks; 4) the smoking ban being implemented; and 5) to a certain extent, the political situation in Hong Kong. Management noted this could lead to more margin pressure.

Smoking ban: Wynn noted that their smoking ban has had some impact but only marginal on the business. There are ongoing conversations with the government to work on how the smoking and non-smoking areas are divided, and they are working on adding an additional smoking room.

Margins: Management noted that its mass margins have so far been largely similar in the past three quarters. However, generally, management did highlight overall margin pressure in October.