Melco Crown declares special dividend

Melco Crown Entertainment Ltd. has announced the declaration of a special dividend as well as an amendment in its dividend policy.

The special dividend ($60 million) represents US$0.44 per share, to be paid on or about February 10, 2017 to shareholders whose names appear on the register of members of the company at the close of business on January 23, 2017.

“The announcement of a special dividend is a positive development as the company returns excess cash to shareholders and signals continued optimism about future cash flow generation of its assets,” said Bernstein in a note on Friday.

The operator also announced it has amended its dividend policy to one targeting a quarterly cash dividend payment of US$0.03 per ordinary share, which will “[provide] a larger, stable and more predictable ordinary dividend payout to shareholders.”

Previously, Melco Crown’s policy was a quarterly dividend of approximately 30 percent of consolidated net income attributable to the company.

Commenting on the change, chairman and CEO Lawrence Ho said: “We want to make certain that we efficiently utilize investor capital.  We currently have a significant level of free cash and more than US$1.2 billion available credit lines.  MCE also continues to generate very significant operating cash flow.  Given these factors, we believe that we can return a meaningful amount of capital to investors now, and in the future, while still retaining significant flexibility to pursue value accretive opportunities.”

In a note, Bernstein analysts said: “While the new dividend will not make MPEL a high dividend payer (i.e., Sands China), the dividend further aligns the yield on MPEL with the broader market. Further, we would expect MPEL to continue to grow their annual dividend in line with growth in the underlying business.”

The new dividend policy will take effect beginning with any dividends declared by the board for the fourth quarter of 2016.