Macau casino operator Melco International Development Limited has released its interim consolidated financial results for the six months to the end of June showing an almost 1,000% increase year-on-year in net profit to just over $1.33 billion.
Controlled by Lawrence Yau Lun Ho, who also serves as the majority shareholder of casino operator Summit Ascent Holdings Limited, Melco International Development Limited revealed that first-half revenues swelled by just over 2,700% year-on-year to reach $715.48 million while the value of its shares improved by 9,500% to $0.86.
Hong Kong-listed Melco International Development Limited is responsible for the City Of Dreams Macau and the Studio City Macau integrated resort casinos as well as the Altira Macau and revealed that its recent success was derived from a special gain it received after taking majority control of its Melco Crown Entertainment Limited joint venture. The Macau-based firm became the single largest stockholder of Melco Crown Entertainment Limited in May after Sydney-listed Crown Resorts Limited agreed to sell off 155 million ordinary shares and this allowed the firm to consolidate its results in this business for the first time.
“In spite of ongoing challenges to Macau’s gaming demand, Melco Crown Entertainment Limited managed to deliver strong operational and financial results in the first half of 2016 thanks to the group’s strategic focus on the resilient mass-market segment and consistent commitment to controlling costs,” read a statement from Melco International Development Limited, which is also responsible for the City Of Dreams Manila development in The Philippines. “The segment profit of $9.37 million represents the share from Melco Crown Entertainment Limited attributable to the group when Melco Crown Entertainment Limited became a subsidiary of the group on May 9, 2016.”
Melco International Development Limited declared that its results were also aided by the performance of its newest property, Studio City Macau, which opened in October and is planning to add VIP rooms with a further 30 gaming tables by the end of the third quarter. It posted net revenues for the six-month period of $362.5 million while generating adjusted earnings before interest, tax, depreciation and amortization of $46.6 million.
“The ramp-up of Studio City Macau has already started to accelerate and its visitation and mass table yield both recorded significant increase in July of 2016,” read the statement from Melco International Development Limited. “This growth is expected to gain more momentum in the second half of the year and beyond.”
Regarding its flagship City Of Dreams Macau property, Melco International Development Limited explained that six-month net revenues dropped 10.3% year-on-year to $1.31 billion while it brought in adjusted earnings before interest, tax, depreciation and amortization of $383.3 million, which represented a decrease of 7.6% primarily due to lower rolling chip earnings and mass-market table games revenues.
These negatives also affected Altira Macau, which saw net revenues fall by 29.2% year-on-year to $207.1 million while the property moreover posted negative adjusted earnings before interest, tax, depreciation and amortization at $12.2 million.
“As the operating environment in Macau has stabilized in the first half of 2016, it is the group’s view that the gaming market in Macau has bottomed out and endeavored to begin recovering by the end of this year,” read the statement from Melco International Development Limited. “Despite the challenges that gaming operators in Macau still face, including the weakened VIP segment, intensified competition, dampened gaming and retail demand from mainland China and the overarching policy and economic uncertainty, Melco International Development Limited has always risen above adversity, stayed ahead of the game and seized opportunities guided by its long-term vision. Melco International Development Limited is confident that the group is strategically positioned for further success through leveraging its diversified portfolio of high-quality assets in our home base Macau and projects overseas.”