Aug. 8 (Bloomberg) -- Melco Crown Entertainment Ltd., the Macau venture between Australian billionaire James Packer and a son of casino mogul Stanley Ho, said second-quarter profit more than doubled on higher mass-market and VIP gambling revenues.
Net income climbed to $181 million from $82.3 million a year earlier, Melco Crown said in a filing yesterday. Adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization, rose to $330.1 million, topping the $310 million median estimate from seven analysts surveyed by Bloomberg.
Melco Crown is building its Studio City casino resort on Macau’s Cotai strip, the city’s answer to the Las Vegas Strip. The Hong Kong-based company is taking on larger competitors, including Sands China Ltd. and Galaxy Entertainment Group Ltd., which have been adding new attractions on Cotai.
City of Dreams, Melco Crown’s flagship casino in the world’s largest gambling hub, attracts mainland visitors with a popular show called the House of Dancing Water featuring motorcycle stunts.
The casino’s rolling chip volume, a measure of VIP gambling, gained 30 percent to $24.8 billion in the second quarter, Melco Crown said. The win rate was 3.1 percent, against an expected range of 2.7 percent to 3 percent, it said.
“Some of the company’s above average VIP win rate (good luck) likely occurred within in-house direct VIP, which had a disproportionately positive impact on EBITDA,” Grant Govertsen, an analyst at Union Gaming Group LLC, wrote in an e-mailed note to clients.
City of Dreams’ mass-market table-game drop increased 35 percent to $1.11 billion, with hold percentage rising to 32.8 percent from 29 percent a year earlier. Slot-machine handle gained 64 percent to $1.2 billion.
Melco Crown dropped 0.2 percent in Hong Kong trading yesterday to close at HK$67, before the earnings announcement. The stock has risen 56 percent this year, beating the city’s benchmark Hang Seng Index’s 4.7 percent decline.
The company is expanding both at home and overseas. In the Philippines, it is partnering with Belle Corp. to develop and operate a casino resort in Manila which is expected to cost $1 billion. Belle holds one of four casino licenses in the Southeast Asian nation.
Lawrence Ho, a son of casino mogul Stanley Ho, is investing in two Russian casino resorts through his other two companies, Melco International Development Ltd. and Summit Ascent Holdings Ltd.
Casino revenue in Macau, the only place in China where casino gambling is legal, is expected to rise to $44.5 billion this year from $38 billion last year, according to Deutsche Bank AG estimates.
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