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Melco profit grows five-fold in late 2011
Local gaming operator Melco Crown Entertainment saw its profit grow 5.6 times as revenue at its City of Dreams casino rose 42 percent. Fourth-quarter net income rose to MOP 858.8 million, two-times higher than the average of three analyst estimates compiled by Bloomberg.
“We have continued to execute on our premium strategy, both in the rolling chip and mass market gaming segments, as well as in our world-class entertainment and other non-gaming amenities,” said chief executive officer Lawrence Ho Yau Lung in the statement.
“We believe our premium mass market focus at City of Dreams represents one of our key competitive advantages, giving us an ability to capture and leverage a loyal and more profitable customer base,” he said.
Fourth-quarter revenue increased about 30 percent to MOP 8 billion, Melco Crown said. And “prevailing market opinions suggest that the mass market revenue growth could outpace VIP growth in Macau during 2012,” the company added.
Total debt at the end of December stood at MOP 18.4 billion, up from MOP 12 billion a year ago. The casino operator hired seven banks to arrange a loan of about MOP 10 billion to fund its Studio City resort project, people familiar with the matter said.
“Our design plans in relation to Studio City are effectively complete and we are undergoing the necessary government processes to obtain the required approvals to commence construction,” Lawrence Ho said.
The company’s ADRs, each representing three shares, climbed 4 percent to USD 11.91 in Nasdaq Stock Market trading yesterday. The stock traded in Hong Kong gained 1.8 percent to close at HK 30.65 today before the earnings report. The shares have advanced 25.1 percent this year.
Melco, a venture between Australian billionaire James Packer and a son of gaming tycoon Stanley Ho, also announced a six-percent pay increase for all non-management level employees starting April.
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