Inside Asian Gaming

INSIDE ASIAN GAMING | February 2012 44 Briefs Regional Briefs attractive valuation. “City of Dreams’s net revenue of US$696mm was in line with our estimates, while adjusted EBITDA of US$186.6mm was 14.5% ahead of our estimate,” said Wells Fargo. “Adjusted EBITDA margin of 26.8% was 111bp ahead of our estimate. Altira net revenue of $268mm was slightly below our estimate, while adjusted EBITDA of US$53.2mm was 5.8% below our estimate,” continued the note. “Adjusted EBITDA margin of 19.9% was 76bp below our estimate. Adjusted EBITDA at Mocha Clubs was $10.2mm vs. our US$13.5mm estimate,” it added. “Studio City design plans are effectively complete, and MPEL is awaiting approvals to commence construction. MPEL is working on financing for the project which could include a bank loan and other debt financing,” stated Mr McKnight. Construction starts on Kazuo Okada’s Manila casino On 26th January, Japanese gambling magnate Kazuo Okada’s Universal Entertainment Corp. broke ground on a US$2 billion casino resort in an area that the Philippine government hopes will become Manila’s answer to the Las Vegas Strip, reports Dow Jones Newswires. The project is also at the centre of a battle between Mr Okada and Steve Wynn, as discussed in this month’s editorial on page . Union Gaming Group analyst Bill Lerner wrote that Mr Okada’s goal in the dispute could be to get access to his locked-up Wynn Resorts shares so he can fund projects such as Manila Bay. Messrs Wynn and Okada had pledged not to sell shares without the other’s permission, according to Mr Wynn. Mr Okada said during the groundbreaking that Universal can get funding for the Manila Bay project on its own but that it is in talks with possible Philippine partners to operate some non-gambling facilities. Universal Entertainment has US$1 billion in cash earmarked for the project and plans to find financing for the remaining $1 billion, said Assistant General Manager Nobuyuki Horiuchi. The 110-acre project, slated for completion in late 2014, includes villas, three hotels, a convention hall and a glass-domed artificial beach. Mr. Okada said the resort will generate around 15,000 jobs. Bloomberry Resorts and Hotels Inc., Belle Corp. and a joint venture between Alliance Global Group Inc. and Genting Hong Kong Ltd. also have been chosen by the Philippines’ gambling regulator to develop casino resorts in the Manila Bay area, which officials hope will put the country’s casino industry on the map. “In five years, we will beat Las Vegas,” Cristino Naguiat, chairman of gambling regulator Philippine Amusement & Gaming Corp. Melco Crown net revenue up 30% in 4Q 2011 Melco Crown Entertainment Limited (SEHK: 6883, Nasdaq: MPEL), a developer and owner of casino gaming and entertainment resort facilities focused on the Macau market, reported its unaudited financial results for the fourth quarter of 2011 on 9th February. Net revenue for the fourth quarter of 2011 was US$1,008.3 million, representing an increase of approximately 30% from US$773.7 million for the comparable period in 2010. The year-on- year increase in net revenue was primarily driven by a group-wide increase in gaming volumes and significant improvements in mass table games hold percentages, as well as increasing contributions from hotel, food & beverage and entertainment segments. Adjusted EBITDA [earnings before interest, taxes, depreciation, and amortisation] was US$231.6million for the fourthquarter of 2011, an increase of 73% from US$133.8 million of Adjusted EBITDA in the fourth quarter of 2010. The significant improvement in profitability was primarily a result of the ongoing increase in contribution from our mass market operations, particularly the mass table games segment at City of Dreams, together with strong group-wide rolling chip volumes. Cameron McKnight, Senior Analyst at Wells Fargo in New York, said in a note that MPEL’s fourth quarter EBITDA was slightly ahead of the finance house’s estimate and 11.3% ahead of market consensus. He indicated it was due to better than normal house hold on baccarat during the period. Mr McKnight added that MPEL’s own figure for adjusted quarterly EBITDA—taking account of normalised baccarat hold—came in at US$200 million. This was actually 5.4% belowWells Fargo’s US$211 million estimate for normalised EBITDA. “Results were largely driven by City of Dreams, where adjusted EBITDA was 4.9% ahead of our estimate and 14.5% ahead of consensus with better than expected margins,” stated Mr McKnight. “EPS [earnings per share] of $0.20 beat our estimate of $0.18. While normalized results were below our estimates, we are maintaining our Outperform rating on MPEL on positive fundamentals, the market share story at City of Dreams, long term growth trajectory and an Earnings driver—City of Dreams Rendering of Universal Entertainment Corp.’s planned Manila casino resort