NEW YORK, Aug 23, 2011 (GlobeNewswire via COMTEX)
Melco Crown Entertainment Limited (Nasdaq:MPEL), a developer and owner of casino gaming and entertainment resort facilities focused on the Macau market, has reported its unaudited financial results for the second quarter of 2011.
Net revenue for the second quarter of 2011 was US$960.0 million, representing an increase of approximately 67% from US$573.6 million for the comparable period in 2010. The significant increase in net revenue in the second quarter of 2011 from the same period in 2010 was mainly attributable to improved rolling chip volumes, normalized rolling chip win rates at City of Dreams, continued strong growth in mass market and hotel operations at City of Dreams, as well as contributions from other non-gaming amenities such as The House of Dancing Water and Club Cubic.
Adjusted EBITDA<1> was US$216.3 million for the second quarter of 2011, as compared to Adjusted EBITDA of US$73.4 million in the second quarter of 2010. The 195% year-over-year increase was primarily as a result of the substantial growth in gaming volumes, a sustainably improved mass market hold percentage at City of Dreams and a more normalized blended rolling chip win rate across both City of Dreams and Altira Macau, combined with the Company’s continued focus on operating margins.
On a U.S. GAAP basis, Melco Crown Entertainment recorded net income for the second quarter of 2011 of US$66.7 million, or US$0.13 per ADS, compared with a net loss of US$30.1 million, or a loss of US$0.06 per ADS, in the second quarter of 2010. The year-on-year improvement in net income primarily resulted from the significant improvement in operating fundamentals at both City of Dreams and Altira Macau, partially offset by increased interest costs from the high yield and RMB denominated bond as well as higher depreciation expense associated with The House of Dancing Water, one-off charges relating to the refinancing of the City of Dreams Project Facility, and transaction costs related to the Studio City acquisition.
Mr. Lawrence Ho, Co-Chairman and Chief Executive Officer of Melco Crown Entertainment, commented, “These results represent another strong quarter for our Company, driven by significantly improved operating performance across all areas of the business. Our second quarter results reflect record consolidated EBITDA on record setting gaming volumes for our Company. Our overall profitability continues to reflect our various cost containment initiatives that help drive strong operating leverage.
“The House of Dancing Water is soon to celebrate its first anniversary in September. Since its grand opening last September, this spectacular extravaganza has become a phenomenal attraction and has earned plaudits from audiences and critics alike. The show has entertained over 700,000 guests with occupancy levels above 90% on average per show. The House of Dancing Water has significantly reinforced City of Dreams’ entertainment proposition and has generated meaningful positive ripple effects throughout the business, including higher property visitation, hotel occupancy rates, and gaming spend.
“We continue to deliver on our objective of profitably expanding our mass market business, particularly the premium mass segment, while delivering solid rolling chip volume growth without compromising our disciplined approach in this segment.
“As recently announced, we have successfully completed the acquisition of a 60% interest in the Studio City project on Cotai. This project is another significant milestone for the Company, and we believe its completion will complement and expand our current portfolio of gaming assets in Macau. Our interest in Studio City represents a unique and attractive opportunity for our shareholders and employees that further demonstrates our long term commitment to Macau. We continue to work on our design plans and are currently evaluating financing plans, including a bank loan and other debt financing, to fund this project. We look forward to working closely with the Macau government to bring this project to completion.
“We are also excited about the recently announced dual listing proposal. Upon completion of our Hong Kong initial public offering, our dual listing will provide our existing shareholders with much enhanced liquidity and will also broaden the Company’s investor universe. We believe the dual listing will make a major contribution towards the dynamic development and growth of the Company in the long term.”
City of Dreams 2Q Results
For the quarter ended June 30, 2011, net revenue at City of Dreams was US$607.9 million compared to US$309.3 million in the second quarter of 2010. City of Dreams generated Adjusted EBITDA of US$151.3 million in the second quarter of 2011, an increase of 253% when compared to US$42.9 million in the second quarter of 2010.
The year-over-year improvements were driven by substantial growth in both rolling chip and mass market volumes, improvements in mass market hold percentages and rolling chip win rates, as well as increased hotel sales and contributions from The House of Dancing Water and Club Cubic.
Rolling chip volume for the second quarter of 2011 totaled US$19.3 billion, an increase of 59% from US$12.2 billion from the comparable period in 2010. The rolling chip win rate was 2.8% in the second quarter of 2011, in-line with the expected rolling chip win rate range of 2.7% – 3.0%. The rolling chip win rate for the comparable quarter in 2010 was 2.2%.
Mass market table games drop for the second quarter of 2011 totaled US$750.5 million, an increase of 55% from US$483.7 million for the comparable period in 2010. The mass market hold percentage was 23.6% in the second quarter of 2011, an increase from 22.0% in the second quarter of 2010. At City of Dreams, we expect our mass market table games hold percentage to range from 22%-25%.
Slot handle for the quarter ended June 30, 2011 was US$568.9 million, up 24% from US$458.2 million generated in the same period of 2010.
Total non-gaming revenue at City of Dreams in the second quarter of 2011 was US$54.1 million, an increase of 69% from US$32.1 million for the second quarter of 2010. Occupancy per available room in the first quarter of 2011 was 90% versus 81% in the second quarter of 2010. The average daily rate (ADR) in the second quarter of 2011 was US$170 per occupied room, which compares with US$152 in the comparable quarter of 2010, an increase of 12%.
Altira Macau 2Q Results
For the quarter ended June 30, 2011, net revenue at Altira Macau was US$311.5 million compared to US$230.6 million in the second quarter of 2010. Altira Macau generated Adjusted EBITDA of US$73.1 million in the second quarter of 2011, an increase of 99% when compared to Adjusted EBITDA of US$36.7 million in the second quarter of 2010. The significant year-over-year improvements in net revenues and Adjusted EBITDA were driven by strong rolling chip volume growth and substantially improved operating margins.
Rolling chip volume totaled US$13.2 billion in the second quarter of 2011, an increase of 39% from US$9.5 billion for the second quarter of 2010. The rolling chip win rate was 3.1%, compared to a win rate of 3.2% for the same period in 2010. The expected rolling chip win rate range is 2.7%-3.0%.
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Mass market table games drop totaled US$147.7 million in the second quarter of 2011, an increase of 93% from US$76.5 million generated for the comparable period in 2010. The mass market hold percentage was 15.8% in the second quarter of 2011 compared with 18.2% in the second quarter of last year. At Altira Macau, we expect our mass market table games hold percentage to range from 15.0%-17.0%.
Total non-gaming revenue at Altira Macau in the second quarter of 2011 was US$7.8 million, up slightly from the second quarter of 2010. Occupancy per available room in the second quarter of 2011 was 97% compared to 93% in the second quarter of 2010. ADR was US$200 per occupied room for the second quarter of 2011, compared to US$166 in the same period of 2010, an increase of 21%.
Mocha Clubs 2Q Results
Net revenue from Mocha Clubs totaled US$32.4 million in the second quarter of 2011, up from US$26.9 million in the second quarter of 2010. Mocha Clubs generated US$10.1 million of Adjusted EBITDA in the second quarter of 2011, an increase of 42% when compared to Adjusted EBITDA of US$7.1 million in the same period in 2010.
The number of gaming machines in operation at Mocha Clubs averaged approximately 1,600 in the second quarters of 2011 and 2010. The net win per gaming machine per day was US$226 in the quarter ended June 30, 2011, as compared with US$184 in the same period in 2010, an increase of 23%.
Other Factors Affecting Earnings
Total non-operating expense for the second quarter of 2011 totaled US$60.8 million, which included US$27.4 million in net interest expense, other finance costs of US$4.5 million, a US$4.3 million charge relating to a change in fair value of an existing interest rate swap arrangement as well as a one-off expense of US$25.2 million associated with the recent refinancing of the City of Dreams Project Facility. There was no capitalized interest during the second quarter of 2011.
Depreciation and amortization costs of US$83.6 million were recorded in the second quarter of 2011, of which US$14.3 million was related to the amortization of our gaming sub-concession and US$4.9 million was related to the amortization of land use rights. The year-over-year increase in depreciation and amortization costs is primarily related to the opening of The House of Dancing Water in the third quarter of 2010 and Club Cubic at the beginning of the second quarter of 2011.
Financial Position and Capital Expenditure
Cash and cash equivalents as at June 30, 2011 totaled US$1,395.3 million, including US$368.4 million of restricted cash. Total debt at the end of the second quarter of 2011 was US$2.4 billion, and total net debt to shareholders’ equity as of June 30, 2011 was 40%.
Capital expenditures for the second quarter of 2011 were US$8.5 million, predominantly related to various projects at City of Dreams and Altira Macau.
Six Months’ Results
For the six months ending June 30, 2011, Melco Crown Entertainment reported net revenue of US$1,766.5 million versus US$1,141.2 million in the six months ending June 30, 2010. The year-over-year increase in net revenue was driven by the significant improvements in operating performance at City of Dreams and Altira Macau, as well as contributions from The House of Dancing Water and Club Cubic.
Adjusted EBITDA for the first six months of 2011 was US$337.6 million, as compared with an Adjusted EBITDA of US$160.3 million in the first six months of 2010. The year-over-year improvements in net revenue and Adjusted EBITDA were primarily attributable to the increase in operating revenues, improvements in mass market hold percentages, as well as through a committed cost control focus at all business units.
On a U.S. GAAP basis, Melco Crown Entertainment reported net income of US$73.8 million, or US$0.14 per ADS, for the first six months of 2011, compared to a net loss of US$42.6 million, or a loss of US$0.08 per ADS, for the first six months of 2010.
