Macau’s mass market gamblers helped drive revenue and profits higher for casino operator Melco Crown Entertainment (MCE) during the first three months of 2014. The joint venture of Hong Kong’s Melco International Development and Aussie casino operator Crown Resorts reported revenue up 19% to $1.35b, of which all but $80m came via gaming revenue. Adjusted earnings rose 31% to $387.5m and net income hit $239.5m, over four times the $53.8m recorded in the same period last year, thanks in part to Q1 2013 having been weighed down by debt refinancing charges.
Business was booming at MCE’s flagship City of Dreams property in Macau, with revenue up 28% to $1.074b and earnings up 38% to $341.4m. MCE credited the good fortune to a 44% rise in mass market table game revenue and a five-point gain in mass win rate to 37.5%. VIP rolling chip volume was up only 3% but win rate gained 0.3 points to 3% and slot handle shot up 45% to $1.49b.
Mass market gains weren’t enough to rescue revenue at Altira Macau, which fell 13% to $229.8m. Mass table drop rose 24% but win fell 1.7 points to 13.3%, while VIP turnover fell 14% to $10.1b. The Mocha Clubs slot halls reported revenue up 16%, despite a net loss of two shops since last year. Impressively, despite the average number of machines in use falling 30% to 1,400, win per machine per day rose 48%, so less is more, we guess.
MCE CEO Lawrence Ho said the mass market gains validated the company’s “on-going table and room optimization strategy, which has resulted in a shift of more resources to the mass market segment.” The Studio City project remains on track to open in Macau in 2015, the first of the new mega resorts scheduled to open on Cotai in coming years, while City of Dreams Manila is set to open in the Philippines’ Entertainment City development later this year.
