Wynn Resorts’ EBITDA takes its biggest nosedive since 2009



Adjusted property EBITDA

Adjusted property earnings before interest, taxes, depreciation, and amortization (or EBITDA) is one of the most important performance metrics to gauge how casino properties are performing.

WYNN’s adjusted property EBITDA fell a whopping 29.3% year-over-year to $352 million. This is its biggest year-over-year fall of adjusted property EBITDA since the second quarter of 2009.

WYNN’s adjusted property EBITDA in Macau fell 35.5% year-over-year, while in Las Vegas it fell by 10.4%. WYNN derives ~70% of its revenues from Macau, which was badly affected due to the lack of VIP participation over the last few quarters, which stems back to China’s president cracking down on corrupt officials.

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Full-year operating performance

Adjusted property EBITDA declined 2.1% to $1,773.3 million in 2014. Adjusted property EBITDA increased 5.9% to $515.2 million at Wynn Las Vegas and fell 5.0% to $1,258.1 million at Wynn Macau.

Adjusted property EBITDA is also used by casino companies such as Las Vegas Sands (LVS), MGM Resorts (MGM), and Melco Crown Entertainment (MPEL) but may not be directly comparable across companies.

Investors can hold a diversified portfolio in these casino companies by investing in ETFs such as the VanEck Vectors Gaming ETF (BJK) and the Consumer Discretionary Select Sector SPDR Fund (XLY), which give a much broader exposure to the leisure industry.

Key takeaways from the 4Q14 earnings call

Matthew O. Maddox, president of Wynn resorts (WYNN), said that the adverse effect on EBITDA was a direct result of low hold in the premium mass area mainly in October and November.


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