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Takeaway: Benefiting from releasing Q1 after most Macau, MPEL doesn't miss. Margins were a positive surprise.



  • Macau still weak demand environment
  • Control operating costs
  • Gained RC volume share in 1Q
  • Improved mass share in April
  • Non-gaming entertainment - MPEL the leader
  • Studio City: on budget, on time (targeting Q3 but not a hard target) - management seemed to hedge on this. We think a Q3 opening is not in doubt
  • 79% of mgmt team are locals
  • CoD Manila:  customer database very strong. Hotel occupancy at 75%. Mass market strong.  VIP junkets will open in coming months.
  • Property EBITDA margin (including CoD) 24.3% compared with 28.8% in 1Q 2014, 25.1% in Q4 2014.
  • Property Macau margins: 25.5% , unchanged QoQ
  • Q1 2015 hold-adjusted EBITDA:  benefited from $6m of better luck overall ($12m better hold at CoD offset by $6m lower hold at Altira)
  • CoD building lease 1Q 2015: US$7m 
  • 2Q 2015 guidnace
    • D&A: $110-115m
    • Corp expense: $32m
    • Consolidated interest expense: $40m ($11m relating to CoD Manila, $37m capitalized interest)

Q & A

  • Govt has engaged with MPEL on gaming policy (e.g. smoking ban, tourist visa)
  • CoD Manila:  quite pleased with how it's tracking.  Grand opening on Feb 2. Manila is a market where competitors are much more aggressive with regards to reinvestment rates.  But promotions/giveaways have tapered down recently.  Junket VIP now beginning to ramp up (big operator opening this weekend).
  • Dividend policy: prudent in setting initial dividend policy.  Comfortable maintaining dividend. 
  • Studio City: non-gaming attractions are different from CoD. Believe they will be profitable there as stand-alone.
  • Sees further efficiencies on a EBITDA per table
  • Doing a little bit better than Macau market on VIP contribution
  • On a QoQ basis, saw increase in mid-tier premium mass segment. Comped 100 more rooms in Q1 in mid-tier premium mass segment to boost occupancy.
  • Long-term outlook on Macau hasn't changed
  • Macau Margins:  had identified issue of VIP deterioration spreading to premium mass segment.  In April, had best mass share in last 2 years
  • Premium mass hold rate: quite happy
  • Smoking ban impacted mass gaming floor. Mass Hold % averaged down with lower betting levels (due to changes to in mix of customers).  Should be able to sustain mass hold % (seeing improvement in April)
  • CoD & MSC have own non-recourse agreements. These debt deals make it very difficult to move tables from one property to the other.
  • Has 2 out of the top 5 junket operators. Hopeful to add one more top 5 junket in Philippines. Had soft junket opening in April.
  • CoD Macau: got table allocation 4-6 wks before opening
  • Phillipines: longer-term could be another Vegas or Singapore.