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In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance

OVERALL:  

  • BETTER:  VIP hold was high at both Altira and City of Dreams but that was already in our numbers and should’ve been in the Street estimates as well. MPEL beat us everywhere on the volume side, Mass/VIP, Altira/CoD.

STUDIO CITY

  • SAME:  Studio City remains on schedule and on budget with expected opening date in mid-2015
  • PREVIOUSLY:  "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 

  • BETTER:  Mass drop increased 35% in 2Q. 
  • PREVIOUSLY:  "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

  • BETTER:  Favorable VIP mix and higher hold benefited margins
  • PREVIOUSLY:  
    • "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 PHASE 3

  • SAME:  Construction will begin by end of year.  Expected opening will be end of 2016/2017.
  • PREVIOUSLY:  “We are optimistic that we'll break ground before the end of the year.

WAGE GROWTH

  • SAME:   Higher wages impacted 2Q by $4MM
  • PREVIOUSLY:  "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

  • SAME:  Will open in mid-2014.  Believes the tax situation at PAGCOR will be resolved.
  • PREVIOUSLY:  
    • "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."