In preparation for MPEL's F2Q 2013 earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.
STUDIO CITY
- "Studio City, our cinematically-themed mass market focused integrated casino resort, remains on track to open in mid 2015. The project remains on time and on budget with expected design and construction costs remaining at $2.04 billion...total spending for 2013 is between $800 million to $1 billion."
COD MASS
- "We continue to improve the two major signature club area on improving their service. So you'll note that in the next two quarters some improvement in this premium mass area with nice improvement as well as well as the service level that we are bringing to the property."
COD GAMING MARGINS
- "I think the primary driver, and I think there is room, is what's happening on the gaming floor and what's happening with the mix of business. Given our success in the mass market business and that, the strength in that segment overall, we do see a potential for favorable mix shift over time, which will drive blended margin higher."
- "First, I think, gaming floor, we continue to see a positive trend in terms of hold percentage on the floor as well as absolute revenue."
- "I think our retail area, although it's relatively small compared to the neighbor, it's already up to a level which is quite comparable with the neighbors. So I think with this kind of improvement in our positioning in the last few quarters, it has started to pay off in terms of this non-gaming higher margin EBITDA contribution. So we hope that that trend continue and you'll see some more improvement in the next few quarters."
COD NON-GAMING MARGINS
- "While not a major contributor to the overall results, that's sustainable going forward."
COD PHASE 3
- “We are optimistic that we'll break ground before the end of the year.
WAGE GROWTH
- "As your modeling should anticipate, as of April, it increased fairly market wide of a 5% wage rate increase in your model and that's not inconsistent with what we experienced last year as well despite incremental supply in the market, incremental staffing needs across the market. So this year, we think 5% is very manageable and one that we expect to be consistent throughout the year. But I would encourage you to flag that in your models going into the next quarter."
PHILIPPINES RESORT
- "Will open in mid-2014."
- "In this quarter, our pre-opening expense of about $1.9 million. About two-thirds of that was Philippines. As that project ramps up over the course of the year into the mid single digits and then subsequent from that into 2014, but that will increase over the course of this year."
- "Our view is that the tax situation will be resolved favorably. So no change in our expectation of ROIC."
CAPEX
- "But if we exclude Phase 3, we'll have CapEx in the next quarter of something in the $225 million range and wrapping up by about $25 million in the subsequent quarter and then closer to $400 million in the fourth quarter. So that includes Studio City as well obviously."
3Q NON-OPERATING GUIDANCE
- "Total depreciation and amortization expense is expected to be approximately $90 million to $95 million, corporate expense is expected to come in at $20 million to $22 million, and consolidated net interest expense attributable to MCE is expected to be approximately $40 million to $42 million, which includes finance leased interest of $10.8 million relating to the Philippines development and approximately $11.8 million of interest associated with Studio City. This reflects approximately $6 million of capitalized interest related primarily to Studio City."
- [Interest expense] "The gross amount should be a good number going forward as a run rate, approximate run rate. I anticipate that our – the amount of capitalized interest that we have would go up over the course of the year, but the number we provided for Q2, I think, is a solid number and then perhaps declining a bit over the remainder of the year."