Melco Crown reports US$39.4m net loss
Macau casino operator Melco Crown Entertainment booked a widely expected net loss of US$39.39 million during the first full quarter of operations at its US$2.1 billion City of Dreams mega resort.
The June 1 launch of the 467-table Cotai casino-hotel complex saw revenue for the three months to September soar 132 per cent from the previous quarter to US$500.33 million, mainly driven by robust VIP betting volumes.
But the bottom line was dragged down by higher depreciation and amortisation related to City of Dreams and heftier interest payments on Melco Crown's US$1.68 billion in senior secured debt outstanding.
Melco Crown said City of Dreams booked earnings before interest, tax, depreciation and amortisation (ebitda) of US$46.64 million on net property revenue of US$287.7 million.
The results were largely in line with market expectations. Melco Crown's reported revenue was 1.2 per cent below the US$506.4 million forecast in a Bloomberg survey of analysts. Ebitda at US$55.62 million was 1.7 per cent short of forecasts, while actual loss per share at 2.6 US cents was better than a forecast loss of 9.5 US cents.
City of Dreams, Melco Crown's second property after the two-year-old Altira casino hotel (formerly the Crown), opened across the street from the Venetian Macao. City of Dreams has two 300-room hotels - the upscale Crown Towers and the mid-range Hard Rock. An 800-room, twin-tower Grand Hyatt opened only last month.
Gross VIP chip sales at City of Dreams totalled US$9 billion during the quarter, and the 'win rate' on betting volumes was within the expected range of 2.7 to 3 per cent. That marked a drastic turnaround from the dismal 0.79 per cent win rate City of Dreams suffered in June - an unlucky streak that marred the property's first month in business.
VIP chip sales at the Altira were US$9.8 billion, down 31 per cent from a record quarter a year earlier but up from US$9.68 billion in the second quarter.
More tourist-oriented mass-market table games at City of Dreams showed room for improvement, with the 'drop', a proxy measure for betting volumes, reported at US$390 million. For comparison, that is roughly on par with the Grand Lisboa, slightly better than Galaxy's StarWorld and lags well behind the Venetian, Wynn or Sands casinos.
Slot machine 'handle', or betting volume, was US$285 million with a win per machine per day of US$108.