Philippines-listed casino operator Melco Crown (Philippines) Resorts Corp. bounced to a PHP148.6 million (US$2.97 million) profit in the first three months of the year.
In a filing with the Philippine Stock Exchange, Melco said that its Q1 profit is a sharp turnaround from the net loss of P1.136 billion ($22.73 million) in the same period last year.
Melco – which owns half of operations at City of Dreams Manila – reported improved operating revenues, lower employee benefit expenses, lower depreciation and amortization and net foreign exchange gains for the period, partially offset by increases in operating costs, payments to the Philippine parties as well as interest expenses.
Melco’s total net operating revenues were PHP7.9 billion ($158.09 million), up 73.6 percent from PHP4.53 billion ($90.65 million) from the same period last year.
The increase in total net operating revenues was primarily driven by improved casino revenues, according to the casino operator.
Casino revenues jumped by 80 percent year-on-year to P7.3 billion ($146.08 million), accounting for 93 percent of total net operating revenues.
Apart from higher volume of bets, City of Dreams enjoyed a higher win rate across all gaming segments.
A casino’s ‘win’ or ‘hold’ rate is based on the element of luck but is also affected by gaming limits, a player’s skill and resources and amount of time spent in the casino. While it’s often said that the house always wins, sometimes it wins more and sometimes less than the statistical probability.
Despite a strong start, Melco said that it remains cautiously optimistic about the growth prospects this year.
“The Group is exposed to a number of trends, events and uncertainties, which can affect its recurring revenues and profits. These include levels of general economic activity, political stability, market competition, possibilities of any natural disasters, legal and license terms compliance, tax rates, as well as certain cost items, such as operating costs, labor, fuel and power,” Melco said. “The Group collects revenues and pay expenses in various currencies and the appreciation and depreciation of other major currencies against the Philippine peso may have a negative impact on the Group’s reported levels of revenues and profits.”
