MPEL should report Q3 EBITDA above the Street
We are projecting that MPEL will report $988 million of net revenue and $217 million of EBITDA, in-line and 2% ahead of consensus, respectively. On a hold adjusted basis, our EBITDA estimate goes to $210 million, assuming 2.85% hold, and $211 million if we use the historical averages of Altira and City of Dreams. This compares to the Street at $213 million which should be an estimate of absolute EBITDA. Note that consensus EBITDA has climbed from $204 million in the past two weeks to $213MM, due in part to the slightly higher hold percentage.
3Q Detail
We estimate that City of Dreams will report $740MM of net revenues and $198MM in EBITDA (2% above consensus)
- Our net casino win projection is $720MM
- VIP net win of $438MM
- Assuming 15% direct play, we estimate $19.5BN of RC volume (down 4% YoY) and a hold rate of 3.14%
- Using CoD’s historical hold rate of 2.91%, EBITDA would be $12MM lower and net revenues would be $43MM lower
- $245MM of mass win, up 31% YoY
- $38MM of slot win
- VIP net win of $438MM
- $20MM of net non-gaming revenue
- $22MM of room revenue
- $13MM of F&B revenue
- $21MM of retail, entertainment and other revenue
- $37MMM of promotional allowances or 65% of gross non-gaming revenue or 5.1% of net gaming revenue
- $429MM of variable operating expenses
- $349MM of taxes
- $67MM of gaming promoter commissions in addition to the rebate rate of 90bps (we assume an all-in commission rate of 1.24%)
- $25MM of non-gaming expenses
- $87MM of fixed operating expenses up 6% YoY and down $2MM QoQ
We project $215MM of net revenues and $31MM in EBITDA for Altira (1% above consensus)
- We estimate net casino win $209MM
- VIP net win of $281MM
- $10.9BN of RC volume (17% YoY decrease) and a hold rate of 2.63%
- Using Altira’s historical hold rate of 2.80%, we estimate that EBITDA would be $6MM higher and that net revenues would be $19MM better
- $27MM of mass win, up 15% YoY
- VIP net win of $281MM
- $3MM of net non gaming revenue
- $153MM of variable operating expenses
- $123MM of taxes
- $27MM of gaming promoter commissions in addition to the rebate rate of 94bps (we assume an all-in commission rate of 1.19%
- $3MM of non-gaming expenses
- $28MM of fixed operating expenses in line with 1Q
Other stuff:
- Mocha slots revenue and EBITDA of $34MM and $8MM, respectively
- D&A: $95MM (guidance of $90-95MM)
- Interest expense: $25MM (guidance of $23-25MM)
- Corporate expense: $20MM (guidance of $18-20MM)