September 02, 2015

Probed sought on MCP’s plan to suspend workers due to losses

The Philippine Daily Inquirer yesterday reported that Senator Miriam Defensor-Santiago has sought for a Senate probe on the plan by Melco Crown (Phils) Resorts Corp to suspend 100 workers in its City of Dreams (CoD) Manila facility. The planned worker suspension came amid mounting losses of the company due to higher costs and slowdown in the influx of clients.
The company reportedly plans to resume the employment of these workers when business improves. In her Senate Resolution 1520, the Senator wanted to look into the legality of such moves by MCP and warned that it might be setting a precedent for other employers and business owners to suspend workers when convenient thereby disregarding their workers’ rights.

Our take: MCP incurred P4.9b in 1H15 net losses. Its CoD Manila facility had a grand opening just last February and the company is still ramping up operations. About 23% of its totals costs pertain to wages and employee benefits. While MCP still sustained net losses in 2Q15, its EBITDA turned positive in the quarter due to a 48.7% increase in its gaming revenue over 1Q15. If the Senate probe pushes through, this may weigh on investor sentiment for MCP and may tend to disregard any gains on its operations. – WealthSec