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Wynn Macau turns five-years-old

7 Sep 2011

By Chris Sieroty
MACAU -- Wynn Macau Ltd. turned 5 years old on Tuesday as the gaming company continued to benefit from record gambling revenues and tourism figures generated in the former Portuguese colony.

Macau posted $23.51 billion in gaming revenues overall last year, according to government figures. So far this year, gaming revenues are up 44 percent, quadrupling those of Las Vegas.

Wynn Macau, which opened on Sept. 6, 2006, released an interim report Tuesday for 2011. Revenues were $1.8 billion, up from $1.3 billion in the first six months of 2010. The subsidiary of Las Vegas-based Wynn Resorts Ltd. earned $593.1 million, or 47 cents a share, for the first six months of 2011, compared with $397.8 million, or 37 cents a share, for the same period last year.

"The levels of tourism and overall gaming activity in Macau are key drivers of our business," the company said. "We have benefited from the rise in visitation to Macau over the past several years."

According to the Macau Statistics and Census Service, about 89 percent of visitors to Macau in the first half of 2011 were from mainland China, Hong Kong and Taiwan.

However, Wynn Macau cautioned that tourism levels could be affected by economic conditions, occasional travel restrictions, competition from other gambling destinations and other factors beyond the company's control.

Since its grand opening, Wynn Macau has undergone extensive expansions in 2007 and 2009. Encore at Wynn Macau, another expansion of the 52-acre property, opened on April 10, 2010, according to the mid-year report.

The company said renovations were needed to position for continued growth in a competitive gaming market. As of June 30, 2011, there were 34 casinos in Macau, including 20 operated by SJM Holdings Ltd.

In the report, Wynn Macau said it also faces competition from casinos elsewhere in Asia, including Resorts World Sentosa and Marina Bay Sands in Singapore, and casinos in Malaysia, Vietnam, the Philippines and Australia. Both South Korea and Japan are considering legalizing casino gambling.

Wynn Macau is still awaiting final approval to break ground on its $2.5 billion resort in Cotai. Wynn Resorts expects the Cotai development to double the company's Macau revenue when it opens in 2015.

Shares of Wynn Resorts gained 99 cents, or 0.67 percent, to close Tuesday at $148.89 on the Nasdaq Global Select Market. Wynn shares have traded between $85.72 and $172.58 over the last 52 weeks.

Listed on the Hong Kong stock exchange, shares of Wynn Macau were priced at $2.60 (HK $20.30) on Tuesday.

As of June 30, Wynn Macau had $962.2 million in cash to fund operations, along with a credit line of $987.8 million, according to the report.

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