• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

"I am pleased to announce another record quarter of EBITDA and EBITDA margin for our Company. We continue to deliver strong growth in gaming fundamentals and profitability through a clear focus on execution across our exceptional portfolio of operating assets. City of Dreams mass market tables were again the most productive mass market tables of all major properties in Macau, which is particularly important in a table constrained market."

- Lawrence Ho, Co-Chairman and Chief Executive Officer of Melco Crown Entertainment


  • Margins across all their mass margin segments have shown improvement, which is apparent in their results. Also delivered record RC volumes despite a reallocation of VIP tables to premium mass
  • Heguin island continues to develop
  • Believe that their expertise in Macau will be a competitive advantage in the Phillipines
  • MSC remains on time and on budget to open in 2015.
  • Moving forward with their PH3 expansion at CoD. Optimistic that they will break ground before YE 
  • On a luck adjusted basis, 1Q13 EBITDA would have been $280MM using a win rate of 2.85%
  • Recently paid down the balance of their R/C by $200MM, reducing annual interest by $4MM
  • Non-operating guidance for 2Q
    • D&A: $90-95
    • Corporate: $20-22MM
    • Interest expense: $40-42MM (finance lease interest of 10MM on MCP and 11MM of interest in MSC)


  • Tax changes in the Phillipinnes?  Confident that the additional tax rate can be neutralized by other changes. The 4 casinos are united against the tax change. 
  • CoD: proposing to build an iconic hotel in tower 3 and get potentially more tables in the future. However, even without additional tables they believe that they can get a great return on that project.
  • Smoking ban?  Recognize that the quality of the air in the casino needs to be cleaner. For now though, they believe that their air quality is cleaner than hospitals. 
  • Pick up in volume in VIP RC? Believe that the change in the government transition that was completed in March assured many of their customers and removed a cloud of uncertainty, so now people are comfortable to spend again. Also believe that a lot of CNY VIP customers stayed away because of overcrowding too. Their thoughts on growth for the year are a lot more optimistic than earlier in the year.
  • Anticipate that their capitalized number will rise throughout the course of the year
  • Capex budget for this year and next: still working on CoD budgeting for Ph3. Ex that, capex in 2Q will be in the $225MM range, and then $250MM in 3Q and around $400MM in 4Q
  • Mass hold rate:  the rising of the mass hold is due to the rising number of customers and the increased bet size of their customers. So they do think that the trend in the last 4 Q's is sustainable. 
  • Phenomonal margins in non-gaming? Sustainable going forward.
  • Think that in the Phillippines, the non-gaming amenities will be an even bigger contributor
  • Pre-opening expenses in Philipines- 2/3rd of their $1.9MM charge was related to the Phillipines. That pre-opening charge will increase throughout the year.
  • Working hard to close the gap between their margins at CoD and the competition. Do see continued favorable mix shift which should drive margins higher.  Their gaming revenues continue to approach those of Venetian.
  • Increased competition in the mass segment. Don't see any change in how much they need to reinvest in their mass segment to retain it. Some of their competitors have gotten more aggressive in pursuing the premium mass segment and some even provide rebate to them. They feel like this is the wrong strategy.
  • The increase in unique premium mass players to CoD has increased, but overall visitation is flat. 42,000 visitors per day at CoD over the last 2 months. 
  • Most of the piling work is substantially completed at MSC.  So they are now starting to come out of the ground. Approvals for labor have been very smooth. Have workers on site.
  • Think that the Phillipinnes will be a bigger market than most people expect. 
  • Minimum bet at CoD? They use a dynamic pricing strategy on the tables. They are forced to increase the min bets based on supply and demand. 
  • Update on Gongbei border expansion. Completed but on the Zhuhai side, they are still working on the expansion- should be completed by October. They are also excited about the expansion of border hours, in particular the Lotus Bridge border.
  • MSC spend in 1Q13: $40MM
  • Total 2013 MSC Capex spend: $800-1BN 
  • Altira: 141 VIP tables/ 32 Mass
  • CoD: 212 VIP and 240 Mass
  • Taiwan: they are cooperating with authorities. Maintain that they have done nothing wrong or different from their competitors
  • Walkway between CoD and SCC? Working with Sands China on coming up with a solution - waiting on their neighbor
  • ETG seats being added at CoD: Total 190 stations at the moment. the performance of the stations has been roughly 50% above the slot average. 
  • As of April, there should be a market wide wage rate increase of 5% in Macau


  • Net revenue of $1,145MM and Adjusted EBITDA of $273.5MM
  • The increase in net revenue was primarily attributable to higher group-wide rolling chip volumes and mass market gross gaming revenues, partially offset by a lower group-wide rolling chip win rate
  • The year-over-year increase in Adjusted EBITDA was attributable to strong improvements in mass market performance at City of Dreams, improved group-wide rolling chip volume and our continued focus on cost control, partially offset by a lower group-wide rolling chip win rate.
  • CoD: Net revenues of $836MM and Adjusted EBITDA of $247MM
    • The significant year-over-year improvement in Adjusted EBITDA was primarily a result of substantial growth in mass market table games volumes and improved mass market table games hold percentage together with strong growth in rolling chip volumes, partially offset by a lower rolling chip win rate
  • Altira: Net revenue of $265MM and Adjusted EBITDA of $40MM
    • The reduction in Adjusted EBITDA was primarily a result of a lower rolling chip win rate, partially offset by improved rolling chip volumes
  • The VIP segment in Macau has delivered robust growth in the first part of 2013 while the mass market table games segment remains on its impressive growth trajectory. We continue to be optimistic regarding the market's performance in 2013 and beyond, and expect the introduction of new infrastructure and policy initiatives over the short to medium term, as well as the expansion of Hengqin Island, will further support visitation growth and increasing spend per customer as Macau offers a more diverse offering of entertainment and leisure amenities.

  • Melco Crown Philippines, our majority owned subsidiary, recently completed a Top-Up Placement on the Philippines Stock Exchange raising approximately US$325 million in net proceeds, excluding the over-allotment option which, together with a shareholder loan commitment made by Melco Crown Entertainment, are expected to provide the funding necessary to open our unique integrated casino resort in Manila in mid-2014. The resort in Manila is expected to have approximately 967 rooms and suites, 242 gaming tables and approximately 1,450 gaming machines in addition to a range of entertainment and other non-gaming amenities to attract a wide variety of local and inbound customers.
  • MCP incurred ~$5MM of operating expenses, primarily relate to general and administrative expenses, land rental payments and other fees and costs associated with the corporate reorganization of MCP.
  • Non-operating expenses included:
    • US$61.4 million one-off charge associated with the extinguishment and modification of debt relating to the refinancing of our 10.25% senior notes.
    • Foreign exchange loss of US$4.4 million
    • US$4.1 million of capitalized interest... primarily relating to Studio City
  • Melco Crown Entertainment also incurred US$17.1 million of development costs, which predominantly relate to fees and costs associated with the corporate reorganization of MCP by the Company.
  • Cash: $2.5BN (including $1BN of restricted cash) and debt: $2.7BN
  • Capex: $79MM, primarily related to MSC and MCP and projects at CoD