Melco Crown 16Q2 revenue misses mark

Casino operator Melco Crown Entertainment Ltd’s revenue missed the mark in the 2016 second quarter at $1.07 billion, falling short of analyst estimates of $1.09 billion.

Revenues represented a 17 percent increase from $916.8 million for the second quarter of 2015.

“Macau continues to face challenges in gaming demand,” CEO Lawrence Ho said in a statement.

“However, we believe that revenue trends, particularly in the mass market segments, will improve as Macau further evolves into a multi-faceted, mass market-focused destination, deserving the accolade of being the most exciting gaming and entertainment destination in Asia,” Ho added.

On a U.S. GAAP basis, net income attributable to Melco Crown Entertainment for the second quarter of 2016 was $30.8 million, while adjusted property EBITDA was $245.3 million for the second quarter of 2016, representing an increase of 20 percent year-on-year. The improvement in adjusted property EBITDA was mainly attributable to the contribution from newly-opened Studio City and fully-operating City of Dreams Manila.

Studio City however remained slow in its ramp up, according to analysts.

“Studio City contributed adjusted EBITDA of $24.6 million Q2, below UBSe of $32 million, as the pace of ramp up remains slow. However, management noted that July saw a strong pick up in patronage in Studio City, driven by improved transportation and cross-selling initiatives. Whether the increase in patronage will translate to GGR growth remains to be seen,” said the brokerage.

UBS also adds that the company expects to allocate 30 VIP tables at Studio City in August/September.

“Studio City, our second integrated resort in Cotai, Macau, which opened in late 2015, is still in its ramp-up phase and positioned for further increased revenues and profitability in the future as the property builds a strong customer database through its unique entertainment offerings which attract an increasingly Cotai-based mass market customer,” said Ho.

The operator has declared the payment of a quarterly dividend of $0.0063 per share for the second quarter of 2016, which will be paid on August 31, 2016 to shareholders whose names appear on the register of members of the company as of Tuesday, August 16, 2016.