Profits dip as The VIPs pull back
The high rollers may have slowed their pace but analysts predict better earnings ahead because of the increased exposure to mass gaming
Casino operator Wynn Macau yesterday reported a drop in third-quarter profit, deepening the gloomy outlook for Macau's gaming industry.
The casino operator's quarterly profit fell 3.1 per cent to US$203.3 million, with the lucrative VIP segment shrinking 12.1 per cent as high rollers pulled back.
"Looking into the fourth quarter, we forecast 7 per cent year-on-year gaming revenue growth," said CLSA consumer and gaming research analyst Richard Huang.
Revenue for the industry in the third quarter also grew 7 per cent, slowing from the previous quarter's 13 per cent growth, according to CLSA.
Deutsche Bank this week revised down its growth forecast for Macau's casino industry next year to 7 per cent from 11 per cent, and also cut its 2013 VIP gross gaming revenue growth estimate to zero per cent from 5 per cent.
But it may not be all bad news. A recent CLSA research note also said: "Despite slower growth, we see improving earnings quality with casinos having increased exposure to mass gaming."
Wynn Macau's revenue from VIP tables in the third quarter amounted to US$27.6 billion, compared with US$31.4 billion in the same period a year ago. Its revenue from mass-market table games increased 8.3 per cent to US$211.3 million.
