Melco reported profit in 1st quarter

Gaming operator Melco Crown Philippines (MCP) turned profitable in the first quarter on a sharp increase in casino and non-gaming revenues from integrated resort City of Dreams Manila in Pagcor Entertainment City.

Net profit for the first three months stood at P148.6 million, reversing the net loss of P1.136 billion in the same period last year, the local unit of Macau casino giant Melco said in a filing.

MCP—which owns half of operations at City of Dreams Manila (CoD Manila)—reported improved operating revenue, lower employee benefit expenses, lower depreciation and amortization and net foreign exchange gain for the period, partially offset by increases in operating costs, payments to the Philippine parties and interest expenses.

Local stock brokerage COL raised its fair value estimate on MCP to P10.96 per share, citing this as “one of the main beneficiaries of the growing gaming industry.” It noted that the “outperformance” in the first quarter was due to “higher-than-expected gross gaming revenue.”

Casino revenue for the three months grew by 80 percent year-on-year to P7.3 billion, or 93 percent of total net operating revenue, which surged by 73.6 percent to P7.88 billion.
Apart from higher volume of bets, CoD Manila enjoyed a higher “win” rate across all business 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. —DORIS DUMLAO-ABADILLA