With earnings that beat analysts’ forecasts, a US$2 billion Macau resort going up on time and on budget, and a plan to pay dividends for the first time, Melco Crown Entertainment offered shareholders a lot to like in the announcement of its latest quarterly results.
It was largely a mass-market story for Melco Crown (Nasdaq: MPEL) over the final 12 weeks of 2013, with adjusted EBITDA up year on year by 46% to $394.4 million—six analysts polled by Bloomberg expected $373 million—on a 27% increase in net revenue to $1.39 billion.
VIP volumes at Altira and City of Dreams combined were up only 2% (+9% at CoD and ‒11% at Altira), but mass table drop company-wide grew by 29% and beat the market’s revenue growth rate of 40% with a 55% increase. Slot revenue, which includes the company’s Mocha slot parlors, was up 19% during the period against market-wide growth of 7%—despite the company having to shut down three Mocha venues to comply with government restrictions on slots in residential areas.
Net income more than doubled to $223.2 million, and citing “significant earnings and cash flow” the company said it plans to start paying quarterly dividends equal to 30% of net income, commencing with a special dividend of 34.4 cents per American Depositary Receipt, or 11.5 cents a share.
The company also said Studio City is on track for a mid-2015 opening as the second of the new wave of mega-casinos coming to the territory’s booming Cotai resort district.
This year’s opening of the $1.2 billion City of Dreams Manila, which is fully funded after a recent notes offering, has been pushed from the summer to the second half. The project is a joint venture with a subsidiary of Philippines retail giant SM Investments.
