Date: November 08 2012
Melco Crown Entertainment, the Macau joint venture between billionaire James Packer and a son of gambling tycoon Stanley Ho, said third-quarter profit fell as high-stakes Chinese gamblers curbed spending amid a slowing economy.
Net income fell 7.4 per cent to $US104.9 million ($A100.8 million) from $US113.3 million, based on US accounting standards, according to a statement to the Hong Kong Stock Exchange yesterday. That compares with a $US93.4 million average estimate from nine analysts surveyed by Bloomberg.
Adjusted earnings before interest, taxes, depreciation and amortisation fell 5.8 per cent to $US226.4 million, and net revenue fell 4.3 per cent to $US1.01 billion. Earnings per American depositary share fell to 19 cents from 21 cents.
The decline reflects a pullback by high-rollers, or VIP betters, from China's mainland, even as mass-market betting gained. Melco and rivals such as Galaxy Entertainment Group are expanding on Macau's increasingly popular Cotai strip to reach more middle-class Chinese tourists.
Chief executive Lawrence Ho said he's "optimistic" about growth in 2013, and that the first few days of November were "phenomenal". Melco maintained its market-leading mass-market yields, he said.
So-called rolling chip volume, a measure of VIP gambling, fell 4 per cent to $US19.5 billion in the third quarter, Melco said. Mass-market table-games drop gained 22 per cent to $US889.8 million and slot-machine handle surged 54 per cent to $US816.3 million, it said.
Cotai expansion International casino operators are ramping up expansion in Macau. Mr Ho and Mr Packer's Crown, Australia's biggest casino owner, opened their second Macau casino, City of Dreams, on the Cotai Strip in June 2009 and renamed and rebranded their smaller Crown Macau as the Altira.
Macau's Public Works & Transport department in July gave Melco Crown approval to build a five-star hotel and film production facilities on a 130,789 square-metre site earmarked for the company's Studio City project, according to a government gazette.
Sands plans to invest at least $US2.5 billion to build its fifth resort, to be called "The Parisian," in the Asian hub.
Wynn Macau won a land grant from Macau's government in May to build its second casino in the former Portuguese colony. MGM China Holdings and SJM Holdings have also been given approval to develop casinos in Cotai.
Melco expects the first and second phases of its joint venture casino in Manila to open by the first half of 2014, Ho said on yesterday's conference call.
While Melco's board decided not to pay a dividend now to focus on its development pipeline, it will revisit the issue in a year's time, Mr Ho said.
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