Supplier News

China – Profit surges by 41 per cent at Melco International

By Phil - 2 September 2013

The power of the Macau casino sector helped Melco International to significant financial growth with first half profit increasing 41 per cent to HK$576.9m, compared with HK$408.4m  last year.

Core gaming and Macau business units under its major associate Melco Crown

Entertainment Limited delivered strong net revenue and Adjusted EBITDA growth of 24 per cent and 35 per cent to US$2,440m and US$603.6m respectively in the first half of 2013.

Lawrence Ho, Group Chairman and CEO of Melco, said: “I am glad that Melco Group has once again delivered solid results with impressively strengthened financial performance and exciting expansion opportunities into the emerging Asian and Eurasian markets. The Group’s core gaming arm Melco Crown Entertainment has been included in the Forbes Asia’s Fab 50 list for 2013, a prestigious recognition of our success in achieving record-breaking results brought by our operational excellence despite the keen competition. Our flagship property in Macau, City of Dreams continues to expand its customer base as it boosts its profitability, illustrating its success in maximising table productivity in the table supply constrained market.

“The Group’s exciting development pipeline continues to progress well. Studio City, the unique cinematically-themed integrated resort, remains on budget and on track to open in the middle of 2015 in the fast-growing Cotai region. The fifth hotel tower of City of Dreams is to commence construction by the end of 2013, which will be another powerful addition to our wide array of amenities and attractions that City of Dreams already offers its premium-mass and high end customers, providing another tool to further extend our leading position in this key segment.

“Outside Macau, Melco has also been proactively stepping into other Asia and European countries to pursue further growth opportunities and generate meaningful synergies with our existing gaming and entertainment assets. Melco Crown Entertainment has announced its Manila Project with iconic key entertainment attractions that are set to diversify the Philippines’ tourism and entertainment landscape when it opens in the middle of 2014. Entertainment Gaming Asia is expanding its gaming operations through its own regional casinos under its “Dreamworld” brand in Cambodia. Dreamworld

Club, prominently located in the established gaming market of Poipet near the Thailand border, was opened in May 2013 and has already enjoyed an enthusiastic market response.

“Elsewhere, Melco has committed to a five per cent investment in the gaming and resort development project in Russia’s Primorye Region. The Russian casino resort, geographically close to major target feeder markets in Northeastern China, is expected to open in or around September 2014, and will most likely be the first licensed casino operating in the Far Eastern Region of Russia since the ban of gambling in the country (except for the four designated border zones) in 2009. In addition, we have also been invited by Veremonte to take part in the Barcelona World Project as a casino operator.

“Looking ahead, we will continue to strengthen our position as a leading gaming and entertainment company. In addition to our exciting projects in the pipeline, we will also continue to expand our reach overseas, to replicate our success in other markets, so as to maximize return on invested capital and add long term value for our shareholders.”

Growth in Macau was primarily driven by substantially improved group-wide mass table games and higher group-wide rolling chip volumes together with effective cost-control initiatives. City of Dreams has captured meaningful market share in the mass market table games segment, with its mass table yield significantly outperforming all of the other properties in Macau.

EGT, in which the Group has an effective equity interest of approximately 38.14 per cent, operates a gaming machine revenue participation business in Cambodia and the Philippines. EGT achieved an eight per cent revenue improvement for the first half of 2013, mainly attributable to the expansion of its casino operations as well as its gaming chips and plaques business. Following the opening of its first casino project in May

2012, the company opened Dreamworld Club, a standalone slot hall with approximately 300 electronic gaming machine seats, in Poipet near the Thailand border in May 2013.

MelcoLot Limited, in which the Group holds an equity interest of 50.59 per cent, recorded revenue growth of approximately 58 per cent owing to the distribution of lottery terminals for the state-run China Sports Lottery Administration Center. MelcoLot aims to leverage its access to the world-class expertise of its strategic shareholders while increasing its focus on new media technologies and sales platforms in order to capitalise on the growing market in China.