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Melco PBL Entertainment reports results

30 March 2007

NEW YORK -- (PRESS RELEASE -- Melco PBL Entertainment (Macau) Limited (NASDAQ: MPEL) a developer and owner of casino gaming and entertainment resort facilities focused exclusively on the rapidly expanding Macau market, today reported financial results for the full year ended December 31, 2006.

Lawrence Ho, Chief Executive Officer and Co-Chairman of the company, said: "2006 was a year of major milestones and accomplishments for Melco PBL Entertainment. We secured a gaming sub-concession that will allow us to play a leading role in the fast growing Macau market, which, by some measures, surpassed the Las Vegas strip as the world's largest casino gaming center by gaming revenue in 2006. We successfully listed on NASDAQ and concluded an international public offering that raised more than US$1 billion, providing us with substantial resources towards completing our ambitious growth plans, including the on-going development of our two flagship properties, the premier Crown Macau Casino Hotel and the City of Dreams integrated casino and entertainment resort in Cotai. Construction of the City of Dreams is in progress and we look forward to the public opening of the Crown Macau on May 9, 2007.

"Our existing Mocha Clubs business, the largest operator of non-casino gaming machines in Macau, posted solid growth, despite the need to relocate one of our six sites as a result of obtaining the gaming sub-concession. Mocha continues to demonstrate our ability, albeit on a smaller scale, to be innovative, differentiate ourselves and drive strong performance from our operating units. We continue to see tremendous growth opportunities in the Macau market and we are fully committed to ensuring that MPEL plays a central role in its development. We believe that our properties and our imaginative offerings will further enhance the appeal of Macau to visitors from China and around the world," Mr Ho said.

2006 Operating Results

Total revenue for 2006 was US$36.1 million, up 108% from US$17.3 million in 2005, in part reflecting the impact of the acquisition of the gaming sub-concession, which resulted in a change in reporting of Mocha Clubs revenues from a pre-sub-concession service fee basis to gaming revenue based on net win beginning as of September 21, 2006.

Operating EBITDA at the Mocha Clubs business increased by 77% to US$13.2 million in 2006, compared with US$7.4 million in 2005. Total group operating costs and expenses were US$93.8 million in 2006, up from US$21.1 million in 2005. The increase was largely attributable to the commencement of amortization of the company's gaming sub-concession, increased amortization of land use rights for projects under development, and increased pre-opening, selling and marketing investment costs associated with the development of the Crown Macau and City of Dreams projects. Total non-operating expenses were US$22.7 million in 2006, including US$11.2 million in interest expense and US$12.7 million in written-off deferred financing costs principally associated with the company's US$500 million sub-concession credit facility, which was fully repaid with accrued interest from proceeds from the company's IPO in December 2006. The company reported a net loss of $73.5 million in 2006, compared to a net loss of $3.3 million in 2005. Net loss per share in 2006 was US$0.116. Balance Sheet Cash balances at the end of 2006 totaled US$584 million following the December 2006 IPO, which generated initial proceeds of US$1.065 billion, of which US$512 million was immediately used to repay the company's sub-concession loan facility. Not reflected in the company's 2006 balance sheet is an additional US$160.6 million in IPO proceeds received in early January 2007 following the full exercise of the underwriters' over-allotment option ("greenshoe") which increased the number of American Depositary Shares (ADSs) issued in the IPO by 9,037,500, representing 27,112,500 additional ordinary shares. Total outstanding debt as of the end of 2006 was US$115.6 million in fixed-term loans from the company's two major shareholders, repayable in 18 months from the balance sheet date and carrying interest at 3-months HIBOR per annum. MPEL's debt to shareholders' equity ratio as of the end of 2006 was 6.1%. In March 2007, proceeds from the IPO were used to fully repay US$96.9 million in short-term obligations due to shareholders. The company has not drawn upon any of its existing credit facilities at the current time. Construction in Progress Construction in progress investment at the Crown Macau and City of Dreams projects increased by US$198.2 million during 2006 to reach a total of US$238.6 million as of December 31, 2006. Other property and equipment capital expenditure in 2006 totaled US$21.9 million. Mocha Clubs Gaming revenue from the company's Mocha Clubs totaled US$35.4 million in 2006, comprising US$19.1 million in slot lounge gaming revenue received during the period from September 21 to December 31, 2006 following the company's acquisition of its own sub-concession, and US$16.3 million received in the form of service fees from January 1 to September 20, 2006, when the Mocha Clubs business was operated under the terms of a revenue-sharing service agreement with SJM. On a full-year pro forma basis (which assumes that the Mocha Clubs had operated under an owned gaming sub-concession throughout 2005 and 2006), the Mocha Clubs generated slot lounge gaming revenues of US$71.6 million in 2006, up 35% from pro forma slot lounge gaming revenues of $53.0 million in 2005. The significant growth in the gross gaming revenues generated by the Mocha Clubs came despite the relocation of the company's popular Kampek Mocha Club as a pre-condition to the approval of the acquisition of the sub-concession. The closure of Kampek in September 2006 temporarily reduced the number of Mocha Clubs in operation from 6 to 5 until the relocated Mocha Club was opened in Marina Plaza in December 2006. The number of slot machines in operation at Mocha Clubs averaged 937 in 2006, up 48% from 634 in 2005. Average net win per slot machine per day was US$210 in 2006, down slightly from US$229 in 2005. Average net win per slot machine per day during the fourth quarter of 2006 reached a record US$248. Crown Macau Casino Hotel The company's Crown Macau Casino Hotel, a 36-storey tower containing approximately 183,000 square feet of gaming space with approximately 220 gaming tables and more than 500 gaming machines, remains on schedule and is expected to formally open to the public on May 9, 2007. The total project development budget for the Crown Macau, which includes the value of land for the project site, land premium costs, an estimate of construction costs and an estimate of other items such as capitalized interest on borrowings, pre-opening expenses, together with working capital and cage cash requirements at the time of opening, was previously estimated to be US$512.6 million. Construction costs represented approximately half of the total project development budget. On March 9, 2007 the company confirmed that it had increased the total estimated budget for development of the Crown Macau project by US$71m or approximately 14%. The increase in total budget for the development of the Crown Macau project was based on the company's considered decisions to substantially increase the mass marketing budgets for the launch and post-launch promotion of the property through a campaign to be unveiled on April 12, and to upgrade the FF&E specifications, the design and the fit-out of the premier property. City of Dreams Ground-breaking at the unique City of Dreams project, an integrated casino and entertainment resort on Macau's Cotai Strip, took place in April 2006. A substantial portion of the piling work was completed by the end of 2006 and the project remains on program. The project's first phase, comprising two hotels (the Hard Rock hotel and Crown Towers, Cotai) together with a casino with approximately 450 gaming tables and 2,500 gaming machines and over 50,000 square feet of retail space is targeted to open in late 2008. A purpose built 2,000 seat theater, designed to the development specifications of Dragone Entertainment, is expected to commence performances in the second half of 2009. A second phase, which includes additional hotel space and the serviced apartment blocks, is targeted for completion in the second half of 2009. Phase 2 was originally planned to include two hotels to be separately operated under the Grand Hyatt and Hyatt Regency brands. However, subject to further discussions and the finalization of the relevant agreement with the Hyatt, the company now intends to develop the two hotels as a single twin-tower hotel to be operated under the Grand Hyatt brand with approximately 1,000 rooms and suites. The current total project budget for constructing, developing and opening both phases of the City of Dreams project is approximately US$2.1 billion, inclusive of land, land premium costs, construction costs, FF&E, pre-opening expenses, capitalized fees and finance costs and initial working capital requirements (including cage cash). As the City of Dreams project progresses, the company continues to improve and adjust its overall scope within the original timetable to completion, the existing business plan and the total project development budget. This is occurring within a context of rising costs of construction, services and materials in Macau. The company anticipates an increase in the total project budget for the City of Dreams project and will continue to explore ways to mitigate the impact of potential budget increases through various cost saving measures.

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