MPEL 1Q EARNINGS PREP

05/07/14 09:26AM EDT

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

  • On track to open in mid-2015

  • Targeting a topping out of the entire property and the hotel tower around late-summer, early September.

  • On budget

5th CoD Hotel Tower

  •  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

  • Distribute 30% of net income 

Philippines tax situation

  • Working very closely with PAGCOR

High premium mass hold rate at CoD

  • 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

  • D&A:  $95-100m

  • Corp expense: $24-26m

  • Consolidated net interest expense: $31-33m (includes finance lease interest of $11m (CoD Manila and $17m interest expense associated with Studio City).

  • Cap interest:  $18m

© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.