Melco Crown Profit Doubles on Mass-Market Macau Gambling Revenue
Melco Crown Entertainment Ltd., (MPEL) 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 gambling revenues.
Net income climbed to $181 million from $82.3 million a year ago for the three months ended June, the casino operator said in a filing today. Adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization, rose to $330.1 million from $203.8 million. That compares with the median estimate of $310 million from seven analysts surveyed by Bloomberg News.
Melco Crown is building its new Studio City casino resort on Macau’s Cotai strip, the city’s equivalent of the Las Vegas strip. It is taking on larger rivals including Sands China Ltd. (1928) and Galaxy Entertainment Group Ltd. (27) which have been adding new attractions on Cotai. Melco’s new resort will cost more than $2 billion to build and is scheduled to open by mid-2015.
City of Dreams, the company’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 Hong Kong-based company is expanding both at home and overseas. In the Philippines, it is partnering with Belle Corp. (BEL) 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. (200) and Summit Ascent Holdings Ltd. (102)
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.
Shares of Melco Crown dropped 0.2 percent 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 loss.
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