NEW YORK, Aug. 6, 2009 (GLOBE NEWSWIRE) -- Melco Crown Entertainment Limited (Nasdaq:MPEL), a developer and owner of casino gaming and entertainment resort facilities focused on the Macau market, today reported its unaudited financial results for the second quarter ending June 30, 2009.
For the second quarter of 2009, net revenue was US$215.8 million, down from US$384.6 million for the comparable period ending June 30, 2008. The decrease in net revenue was the result of greater rolling chip volume at Altira Macau in the second quarter of 2008, combined with low rolling chip hold percentages at Altira Macau and City of Dreams in the second quarter of 2009.
Adjusted EBITDA(1) was a loss of US$23.8 million for the second quarter of 2009, as compared to a gain of US$36.4 million in the second quarter of 2008. The EBITDA loss in the second quarter of 2009 was largely attributable to lower than expected rolling chip hold percentages achieved at City of Dreams and Altira Macau. Assuming that both properties had achieved a theoretical rolling chip hold percentage of 2.85%, adjusted EBITDA for the second quarter of 2009 would have been US$15.2 million.
Adjusted net loss(2) for the second quarter of 2009 was US$78.5 million, or US$0.17 per ADS, compared to an adjusted net loss of US$1.7 million in the second quarter of 2008, or US$0.004 per ADS. The increase in adjusted net loss was driven primarily by the aforementioned factors, as well as incremental depreciation and amortization expenses associated with the opening of City of Dreams, combined with an increase in non-capitalized loan interest expense in the quarter under review.
On a GAAP basis, the Company recorded a net loss for the second quarter of 2009 of US$144.0 million, or US$0.30 per ADS, compared to a loss of US$5.7 million, or US$0.01 per ADS, in the second quarter of 2008. The net loss in the second quarter of 2009 was negatively affected by non-recurring, pre-opening expense in the quarter of US$61.3 million and a non-recurring US$3.2 million write down in the carrying value of various project assets.
Lawrence Ho, Co-Chairman and Chief Executive Officer of Melco Crown Entertainment commented, "The reporting quarter marks a major step change for our Company. Our transition from a company primarily focused on development, to a company primarily focused on operations, happened with the seamless opening of our flagship property City of Dreams, on time and on budget, on June 1, 2009.
"We are still in the early stages of ramping up our business and believe that we have additional room for growth as we execute on our various marketing and yield management initiatives. The Grand Hyatt Macau is on track to open by the end of the current quarter, which should be a significant driver of gaming revenue and market share. As we reported on August 3, 2009, the sequential improvement in mass table drop and rolling chip volume at City of Dreams between the first and second months of operations was 33% and 36%, respectively. Media sources indicate that our market share jumped from 9% in June to 18% in July.
Mr. Ho continued, "We held approximately US$660 million of cash at the end of the second quarter, and we expect to have approximately US$176 million of capital expenditures at City of Dreams in the current quarter. Our capital expenditures for phases one and two at City of Dreams will be essentially complete with the opening of the Grand Hyatt Macau.
"With a construction program nearing completion, a stable management team, and a strong balance sheet, we will continue to focus our management attention on the continued execution of our operating plans for City of Dreams, against a macro environment in the mass market which is, in our assessment, likely to materially improve during the remainder of this year."
City of Dreams 2Q Results
City of Dreams opened on June 1 and contributed one full month of operating performance to our second quarter results in 2009.
For the quarter ending June 30, 2009, net revenue at City of Dreams was US$26.8 million and adjusted EBITDA was a loss of US$12.2 million.
Rolling chip volume totaled US$1.94 billion for the second quarter of 2009 and the rolling chip table games hold percentage (calculated before discounts and commissions) was 0.79%. Our target rolling chip hold percentage is 2.85%. Assuming that the property had held at 2.85% in the second quarter of 2009, adjusted EBITDA would have been US$3.0 million.
In the mass market table games segment, drop (non rolling chip) totaled US$100.0 million in the second quarter of 2009 and the mass market table games hold percentage was 16.4%. Our target hold percentage for mass market table games is 16.0%-18.0%.
Total non-gaming revenue at City of Dreams in the second quarter of 2009 was US$4.8 million. Occupancy per available room in the second quarter of 2009 was 78% and the average daily rate (ADR) was US$176 per occupied room.
Altira Macau 2Q Results
For the quarter ending June 30, 2009, net revenue at Altira Macau was US$159.2 million versus US$361.1 million in the quarter ending June 30, 2008. Altira Macau generated an adjusted EBITDA loss of US$6.4 million in the second quarter of 2009 compared with a gain of US$39.6 million in the second quarter of 2008.
Rolling chip volume totaled US$9.68 billion for the second quarter of 2009, down from US$18.51 billion in the second quarter of 2008. The rolling chip table games hold percentage in the second quarter of 2009 (calculated before discounts and commissions) was 2.45% versus 2.71% recorded in the second quarter of 2008. Our target rolling chip hold percentage is 2.85%. Assuming that the property had held at 2.85% in the second quarter of 2009, adjusted EBITDA would have been US$18 million.
In the mass market table games segment, drop (non rolling chip) totaled US$73.6 million in the second quarter of 2009, down from US$93.4 million generated in the second quarter of 2008. The mass market table games hold percentage was 13.9% in the second quarter of 2009, below our expected range for mass market table games hold percentage of 16.0%-18.0%. The mass market table games hold percentage for the second quarter of 2008 was 14.7%.
Total non-gaming revenue at Altira Macau in the second quarter of 2009 was US$8.3 million, down from US$9.7 million in the second quarter of 2008. Occupancy per available room in the second quarter of 2009 was 90% and the average daily rate (ADR) was US$232 per occupied room. This compares with occupancy and ADR of 97% and US$236, respectively, in the second quarter of 2008.
An incremental one-off specific bad debt provision totaling US$3.9 million was booked in the second quarter 2009, recognizing the continued challenges facing broader global economic conditions.
Mocha Clubs 2Q Results
Net operating revenue from Mocha Clubs totaled US$23.8 million in the second quarter of 2009, up from US$22.3 million in the second quarter of 2008.
Mocha Clubs generated US$6.1 million of adjusted EBITDA in the second quarter of 2009, which compares with US$5.9 million in the second quarter of 2008.
The number of gaming machines in operation at the Mocha Clubs averaged approximately 1,440 in the second quarter of 2009, an increase from an average of 1,070 in the second quarter of 2008. The net win per gaming machine per day was US$178 in this period, as compared with US$228 in the same period in 2008.
Other Factors Affecting Earnings
Total non-operating expenses for the second quarter of 2009 were US$3.6 million, which included US$3.9 million in net interest expense and other finance costs of US$1.4 million, partially offset by a US$0.6 million net foreign exchange gain. Capitalized interest during the second quarter of 2009 totaled US$17.0 million. Pre-opening expenses, related entirely to the development of City of Dreams, were US$61.3 million for the second quarter of 2009.
Depreciation and amortization costs of US$48.0 million were booked in the second quarter of 2009, of which US$14.3 million was related to the amortization of our gaming sub-concession and US$4.5 million was related to the amortization of land use rights.
Financial Position and Capital Expenditure
Cash and cash equivalents as of June 30, 2009 totaled US$655.6 million. Total outstanding debt at the end of the second quarter of 2009 was US$1.80 billion, of which US$115.6 million represented loans from the company's two major shareholders. Total debt to shareholders' equity as of June 30, 2009 was 74%.
Capital expenditures for the second quarter of 2009 were US$381.5 million, essentially all of which were attributable to the development of City of Dreams.
Six Month Results
For the six months ending June 30, 2009, the Company reported net revenue of US$432.3 million versus US$867.5 million in the six months ending June 30, 2008. The year-over-year decrease in net revenue was driven by lower rolling chip volume at Altira Macau in the first six months of 2009 as compared to the same period in 2008 and lower rolling chip hold percentage in 2009 as compared to 2008.
The Company reported a net loss of US$179.3 million for the first six months of 2009, compared to a net gain of US$37.5 million for the first six months of 2008. The net loss per ADS for the six month period ending June 30, 2009 was US$0.39 compared to a net gain per ADS of US$0.09 for the same period in 2008.
Conference Call Information
Melco Crown Entertainment will hold a conference call to discuss its second quarter 2009 financial results on Thursday, August 6, 2009 at 8:30 a.m. Eastern Time (8:30 p.m. Hong Kong Time). To join the conference call, please use the dial-in details below:
US Toll Free 1.800.884.5695
US Toll / International 1.617.786.2960
HK Toll 852.3002.1672
HK Toll Free 800 96 3844
UK Toll Free 00.800.280.02002
Australia Toll Free 1.800.002.971
Passcode MPEL
An audio webcast will also be available at http://www.melco-crown.com.
To access the replay, please use the dial-in details below:
US Toll Free 1.888.286.8010
US Toll / International 1.617.801.6888
Passcode 98500194
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Melco Crown Entertainment Limited (the "Company") may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: growth of the gaming market and visitation in Macau; finalization of credit facilities to finance construction of projects; the completion of the construction of our hotel casino resort projects; our acquisition and development of the Macau Peninsula site; increased competition and other planned casino hotel and resort projects in Macau and elsewhere in Asia; the completion of infrastructure projects in Macau; government regulation of the casino industry; our ability to raise additional financing; obtaining approval from the Macau government for an increase in the developable gross floor area of the City of Dreams site; the formal grant of an occupancy permit for Phase 2 of City of Dreams; our anticipated growth strategies; and our future business development, results of operations and financial condition. Further information regarding these and other risks is included in our Annual Report on Form 20-F filed on March 31, 2009 and other documents filed with the Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release is as of the date of this release, and the Company undertakes no duty to update such information, except as required under applicable law.
Non-GAAP Financial Measure
(1) "Adjusted EBITDA" is earnings before interest, taxes, depreciation, amortization, pre-opening costs, property charges and other, stock-based compensation costs, and other non-operating income and expenses. Adjusted EBITDA is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure the performance, and as a basis for valuation, of gaming companies.
