China – Melco’s profit falls by 88 per centBy Phil - 1 September 2015
Melco International saw its first-half net profit fall by a huge 88 per cent to HK$111.1m from a year ago, due to a decline in contribution from associates.
Revenue more than doubled to HK$212.6m in the six months to June. But profits from associates fell dramatically to HK$220.4m from HK$1bn.
Lawrence Ho, Group Chairman and CEO of Melco, said: “While the business environment has been challenging in recent years, Melco Group has continued to achieve progress on its dynamic project pipeline.
“Studio City, which is scheduled to open on October 27 2015, represents the latest of our initiatives to support Macau government’s strategy to diversify the local economy, advancing Macau in its drive to become the region’s premier leisure travel destination. It is developed to have the most widely diversified entertainment offerings ever in Macau, aiming to significantly boost the city’s attraction to Asia’s affluent consumers in search of a world-class, multi-faceted tourism experience. Studio City also embellishes Melco’s distinctively innovative portfolio of assets including City of Dreams, Macau’s leading premium-focused integrated resort.
“Beyond Asia, the Group is also actively evaluating development opportunities and MelcoLot is looking specifically at a boutique casino project in Tbilisi, Georgia and a premium integrated resort project in Spain, close to Barcelona as previously announced.
“In the near future, the gaming industry in Macau is anticipated to face strong headwinds with market conditions expected to remain unfavourable. Further support is expected from the government in line with its strategy to diversify Macau’s economy to non-gaming tourism facilities as part of the city’s evolution into a global tourism and leisure centre. As Studio City opens its doors, we are confident of further penetrating the growing mass market and to facilitate Macau to become a global tourism destination.
“The Group has also carefully evaluated opportunities in other countries such as Japan. Moving forward, Melco will be guided by our vision to become a leading global enterprise in the gaming, leisure and entertainment industry, as it continues its efforts to diversify and seizes opportunities through its wide selection of both gaming and non-gaming attractions worldwide.”
The group’s core gaming and entertainment business in Macau is operated by its 34.29 per cent-owned associate company Melco Crown Entertainment, which delivered stable financial results despite challenging market conditions. Net revenue and Adjusted property EBITDA amounted to US$1,971m and US$458.2m respectively.
Entertainment Gaming Asia, the group’s 64.8 per cent-owned subsidiary, has an established presence in the gaming markets of Cambodia and the Philippines through its slot operations business. It recorded a consolidated revenue of US$15.9m, up approximately 65.2 per cent year-on-year due to increases in both its gaming chip and plaque sales and gaming operations revenue. EGT posted a consolidated net income and Adjusted EBITDA of US$2m and US$5.7m, respectively.