Consensus estimates, management guidance and commentary, and questions for management in preparation for the earnings release/call tomorrow.
1Q14 CONSENSUS
- EBITDA: $363 million
- Revenues: $1.37 billion
- EPS: $0.41
QUESTIONS FOR MANAGEMENT
- May Golden Week trends
- Chinese macro concerns
- Rolling Chip volume down significantly the past few months - what is going on with your junkets?
- Commentary on why your mass market share has trended to its lowest level since Jan 2013
- Are the new developments (e.g.new slot high limit, entertainment upgrade) paying dividends?
- Japan update
- Is there a threshold for how high premium mass hold can reach?
- Any labor (dealer) issues expected at MSC?
- Thoughts on capital return to shareholders
RECENT MANAGEMENT COMMENTARY
Premium Mass:
- Performance continues to be driven by the strength in mass-market table games operations at City of Dreams, which once again outperformed the market both in total mass table GGR growth and importantly on a GGR per mass table basis.
Luck-adjusted margins:
- Company-wide commitment resulted in expanding luck-adjusted margins for the 10th quarter in a row.
Altira
- Continue to look at the EBITDA generation per table
- The VIP segment in Altira continues to go up and flow up and is in the right direction.
CoD Manila
- Middle 2014 opening date
Studio City
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On track to open in mid-2015
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Targeting a topping out of the entire property and the hotel tower around late-summer, early September.
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On budget
5th CoD Hotel Tower
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The project is expected to open in early 2017. With 40 floors and a gross floor area of 150,000 square meters, the tower houses approximately 780 guestrooms, suites and villas exceeding 5 star standards. The hotel also includes a variety of meeting and event facilities and distinctive features, including a 30m high lobby atrium, selection of restaurants, spa, ultra lounge and sky pool.
Dividend policy
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Distribute 30% of net income
Philippines tax situation
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Working very closely with PAGCOR
High premium mass hold rate at CoD
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It's very, very sustainable, especially in a sense that we see a lot of demand from this premium segment.
New developments
- New high-limit slot area near Crown Tower on ground casino floor
- Developing a more like entertainment combined with the F&B concept area on second floor
CoD opex
- Nothing unusual to speak of, in operating expense at City of Dreams. Revenue growth obviously outpaced cost growth; been very pleased with how things are trending and how CoD is able to maintain costs.
1Q Non-operating guidance
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D&A: $95-100m
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Corp expense: $24-26m
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Consolidated net interest expense: $31-33m (includes finance lease interest of $11m (CoD Manila and $17m interest expense associated with Studio City).
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Cap interest: $18m