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While the results were still good compared to historicals, MPEL's results missed the Street and our mark. We suspect commissions and higher fixed marketing costs are to blame.


"The first quarter of 2010 was the first reporting period to benefit from the full complement of hotel rooms and the opening of other non-gaming amenities at City of Dreams. VIP gaming volume at City of Dreams remained strong and our mass market gaming volume continued to show meaningful sequential growth. Additionally, the improvement in our mass market hold percentage is an important driver of revenue and EBITDA and is a consequence of operational improvements rather than table game volatility. We are pleased that our first quarter results provide an early indication of this property's potential, though we continue to believe there is considerable room for additional improvement."

- Lawrence Ho, Co-Chairman and Chief Executive Officer of Melco Crown Entertainment


  • Mass hold rate is in the low 20s today
  • As a result of the commission cap, they enjoyed margin improvement at Altira.
    • Actually it had nothing to do with the commission cap but rather a normal hold %.  EBITDA was the same in 1Q09 actually on lower VIP volumes
  • Increase in Mass hold % is sustainable
    • It is related to length of play
  • EBITDA split between the RC and Mass market was roughly 50/50 at CoD
  • Refinancing update for 2Q2010.  Have concrete plans and an announcement will come shortly. Will maintain a substantial part of the R/C at low rate, which is currently in place
  • 2Q2010 Guidance: D&A - $77MM, Net Interest expense - $20MM, Pre-opening expense - $4MM



  • Group wide cost controls? Confident that they can continue to find cost savings in their cost structure over the next 12 months
  • Serviced apartments? 
    • Their focus for the next 12-18 months are just on operations.  At this point in time, they aren't going to make any decision on serviced apartments. 
    • I'm sure they are also looking to see if the Four Seasons units actually close
  • Any impact from Singapore?
    • No
  • Next growth opportunity?
    • Sure there will be new opportunities in Macau beyond 2013 when the table cap expires
    • By the way they reduced their table count at CoD this quarter by 37 tables sequentially and by 95 tables since they opened
  • April looks like its up slightly up over March.  They are tracking in line with the market.
  • Grand Hyatt mix of customers?
    • 85% of the occupancy is from HK or PRC. Decent amount of the rooms are going to comps there
  • M&A opportunities?
    • I don't understand this question... N
  • Moving the Hyatt occupancy to 90% level?
    • Thinks they can get there over the next few quarters
  • Little correlation between property prices and the Macau market, according to Lawrence
  • 95% of customers in Macau "do not put a head in a bed in Macau"
  • Grand Hyatt is in the 70% occupancy level now
  • Still talking to the government on how the tables get accounted for.  Right now operators are really looking on how to yield their tables better
  • Main gaming floor reconfiguration and impact on yields?
    • Well they have less tables so that means less dealers to pay for and higher utilization
    • They did increase their slot count
  • Does the $20MM of net interest expense include the refinancing costs?  Will the rate be better than Galaxy's H + 450bps?
    • Interest expense is not pro-forma for the new R/C but they aren't looking for any material changes to their current interest rate
    • It sounds like they are getting an term extension in return for a commitment reduction
  • They love the new supply of course. Build it and they will come to Cotai
  • Expect minimum impact from Encore opening
  • 18% direct VIP play
    • Looked more like 15% compared to our numbers
  • All of the data that they have seen suggests that the month of April is running ahead of March. Thinks that the leaked data is erroneous. Simon's comment on hold rate having no impact on reported revenue numbers is just not accurate. Of course hold matters... and the leaked numbers are only related to revenues (at least mid-month) not volumes.
  • Striving to make City of Dreams a '"World of Wonder"
  • LVS's Venetian has 25%+ win rates on Mass consistently, according to Simon
    • According to LVS they have never had a 25% mass hold month. They did average 23.6% in 2009 - on $3,4BN of Mass Drop... which CoD is nowhere near. In 2008, Venetian's win rate on Mass was 19.9% and 17.3% in 2007