NEW YORK, Feb. 24, 2009 (GLOBE NEWSWIRE) — Melco Crown Entertainment Limited (NasdaqGS:MPEL) (“MPEL”), a developer and owner of casino gaming and entertainment resort facilities, today reported its unaudited financial results for the fourth quarter and full year ending December 31, 2008.
For the fourth quarter of 2008, net revenue was US$253.5 million, up from US$179.7 million for the comparable period ending December 31, 2007. The revenue increase was primarily driven by substantially improved operating performance at Crown Macau.
Adjusted EBITDA(1) was US$22.4 million for the fourth quarter of 2008, up from a loss of US$1.6 million in the fourth quarter of 2007.
The Company recorded a net loss for the fourth quarter of 2008 of US$18.9 million, or US$0.04 per ADS, compared to a net loss of US$36.5 million, or US$0.09 per ADS, in the fourth quarter of 2007.
Lawrence Ho, Co-Chairman and Chief Executive Officer of MPEL, commented, “We are entering the homestretch in the development of City of Dreams, our flagship property in Macau. The opening of City of Dreams will solidify our portfolio approach to development and changes the complexion of our company in almost every measurable way, from the market segments we address to our overall market share. MPEL is about to emerge as a full blown operating entity from a company that has to date been largely focused on property development.”
Mr. Ho continued, “City of Dreams remains on time and on budget with an expected opening date in early June of this year. Our conservative approach to managing our balance sheet continues to pay off. City of Dreams remains fully funded and our development pipeline is intact.
“We held approximately US$825 million of cash excluding cage cash on our balance sheet at the end of the fourth quarter and had undrawn credit facilities available of an additional US$320 million. We expect to spend approximately US$620 million on construction activities and pre-opening preparations at City of Dreams from the start of the current quarter through the opening of the property in early June.
“Subsequent to the end of the fourth quarter of 2008, we successfully drew down a further US$270 million on our bank facilities. At this time, our US$1.5 billion term loan is fully drawn and only US$50 million of our US$250 million revolver remains undrawn. Given the current uncertain state of global lending markets, we are determined to accelerate our drawdown schedule and this process is now considered to be completed.
“We have no debt maturities until 2012, when a maximum of US$250 million could come due on our revolving credit facility. Our term loan fully matures in 2014.
“Last month, we named DFS the official operator of the 85,000 square feet of first phase upscale retail space at City of Dreams. The retail offering at City of Dreams is integrated into The Boulevard, a “lifestyle precinct” running throughout the property and directly linking the hotels and casino areas within City of Dreams. In addition to providing a unique shopping environment, The Boulevard will feature iconic, “must see” entertainment and a number of regional and international dining outlets. DFS is a proven and highly respected luxury retail operator in the region and around the world, and we are pleased to be working with them to bring an exciting retail element to the overall guest experience at City of Dreams.
“As some of our competitors have suspended the development of their integrated resort projects in Cotai, the supply growth outlook in Macau has shifted in our favour. We expect City of Dreams to be the only new property to open in Cotai in 2009. We believe that high-quality new supply drives incremental visitation demand, and we are fortunate to be the sole beneficiary of this phenomenon for the foreseeable future. Additionally, more staggered supply growth will give Macau’s expanding transportation infrastructure time to catch up with the expected future increases in visitation.
“In these challenging economic times, we are proud to have managed our company in a prudent manner that allows us to protect the jobs and benefits of our existing team members and to create thousands of new job opportunities and careers for the people of Macau. We are in the process of hiring approximately 7,000 team members at City of Dreams, and we have received applications from roughly 24,000 candidates. We are on track to be fully staffed according to plan and have benefited from an increasingly selective hiring market.
“The rolling chip market in Macau continues to be both challenging and dynamic, primarily due to the headwinds created by the soft global economy. However, we are pleased to have stabilized our rolling chip market share at Crown Macau through the fourth quarter of 2008, the promotional environment remains stable and we are cautiously optimistic that various regulatory measures, including a cap on junket commissions and relaxation of visa restrictions, could improve market conditions over the course of this year.
“Our rebranding efforts at Crown Macau are well underway, and we expect to launch our new proprietary brand for that property in the Spring of this year, well ahead of the opening of City of Dreams.”
Crown Macau 4Q Results
For the quarter ending December 31, 2008, net revenue at Crown Macau was US$225.8 million versus US$158.0 million in the quarter ending December 31, 2007. Crown Macau generated adjusted EBITDA of US$25.7 million in the fourth quarter of 2008 compared with US$4.2 million in the fourth quarter of 2007.
Rolling chip volume totaled US$10.28 billion for the fourth quarter of 2008, up from US$8.53 billion in the fourth quarter of 2007. The rolling chip table games hold percentage in the fourth quarter of 2008 (calculated before discounts and commissions) was 2.89% versus 2.4% recorded in the fourth quarter of 2007. Our target rolling chip hold percentage is 2.85%.
In the mass market table games segment, drop (non rolling chip) totaled US$73.0 million in the fourth quarter of 2008, down from US$87.3 million generated in the fourth quarter of 2007. The average number of mass market tables in service in the fourth quarter of 2008 was 34, as compared to 69 in the fourth quarter of 2007. The mass market table games hold percentage was approximately 15.5% in the fourth quarter of 2008, below our expected range for mass market table games hold percentage of 16%-18%. The mass market table games hold percentage for the fourth quarter of 2007 was 17.5%.
Total non-gaming revenue at Crown Macau in the fourth quarter of 2008 was US$9.0 million, up from US$7.6 million in the fourth quarter of 2007. Occupancy per available room in the fourth quarter of 2008 was 92% and the average daily rate (ADR) was US$238 per occupied room. This compares with occupancy and ADR of 78% and US$221, respectively, in the fourth quarter of 2007.
Mocha Clubs 4Q Results
Net operating revenue from Mocha Clubs totaled US$22.4 million in the fourth quarter of 2008, up from US$21.7 million in the fourth quarter of 2007.
Mocha Clubs generated US$6.7 million of adjusted EBITDA in the fourth quarter of 2008, which compares with US$4.8 million in the fourth quarter of 2007.
The number of gaming machines in operation at the Mocha Clubs averaged approximately 1,091 in the fourth quarter of 2008. Average net win per gaming machine per day increased to US$223 in this period, as compared with US$215 in the same period in 2007.
As of December 1, 2008, Mocha Clubs assumed management of 95 gaming machines in operation at Crown Macau, and the financial contribution from these gaming machines is included in Mocha Clubs results from that date and going forward. As a result, Mocha Clubs had seven venues in operation as of the end of the fourth quarter of 2008.
On February 20, 2009, Mocha Clubs’ Mocha Square venue reopened, which added 75 gaming machines to its market-wide installed base at eight locations throughout Macau.
Other Factors Affecting Earnings
Total non-operating expenses for the fourth quarter of 2008 were US$2.5 million, which included US$1.9 million in interest income and US$0.9 million in net foreign exchange gains, less other non-recurring finance costs of US$5.4 million. Capitalized interest during the fourth quarter of 2008 totaled US$20.8 million. Pre-opening expenses, related entirely to the development of City of Dreams, were US$9.4 million for the fourth quarter of 2008. Corporate expenses and other costs totaled US$10.0 million in the fourth quarter of 2008, of which US$2.5 million is related to non-recurring compensation-related expenses. Total stock based compensation costs for MPEL were US$1.9 million in the quarter ending December 31, 2008.
Depreciation and amortization costs of US$28.0 million were booked in the fourth quarter of 2008, of which US$14.3 million was related to the amortization of our gaming sub-concession and US$4.5 million was related to the amortization of land use rights.
Financial Position and Capital Expenditure
Cash and cash equivalents as of December 31, 2008, including restricted cash, totaled US$883.1 million. Total outstanding debts at the end of the fourth quarter of 2008 were US$1.53 billion, of which US$115.6 million represented loans from MPEL’s two major shareholders. Total debt to shareholders’ equity as of December 31, 2008 was 63%.
Capital expenditures for the fourth quarter of 2008 were US$327 million, essentially all of which were attributable to the development of City of Dreams.
Full Year 2008 Results
For the full year ending December 31, 2008, the Company reported revenue of US$1.41 billion versus US$358.5 million in the full year ending December 31, 2007. The year over year revenue increase was driven by improved operating performance and a full year of operations at Crown Macau, which opened in May 2007.
The Company reported net loss of US$2.5 million for the twelve months of 2008, compared to a net loss of US$178.2 million for the twelve months of 2007. 2008 net loss per ADS was US$0.01 compared to a net loss per ADS of US$0.44 in 2007.