April 19, 2015

MCP posts P6.3b net loss in 2014

Melco Crown Phils Resorts Corp posted net losses of P6.30b in 2014 vs. P2.46b in 2013. The company had a soft opening on 14 Dec 2014 and held a grand launch on 2 Feb 2015. With less than a month of gaming operations last year, MCP generated only P300m in gaming revenues, P33.4m in hotel revenues and P96.8m in entertainment, retail and other revenues. These were weighed by P4.66b in operating costs and expenses related to gaming taxes and licence fees, salaries and wages, and depreciation and amortization. The company also incurred P1.92b in interest expenses.

Our take: MCP’s losses were higher than our estimate of P4.2b and the consensus forecast of P3.73b. We anticipate the company to be able to ramp up operations after the grand opening last February although it may face some headwinds in attracting foreign VIP clients amid China’s continued crackdown on corruption and gambling. It remains to be seen how fast the company can attract the premium mass market players and however it will fare in attracting domestic players. We will review our 2015 estimates in light of the 2014 numbers and pending details from the initial months of operations. – WealthSec