Melco Crown says mass market to boost company growth

Melco Crown Entertainment said it stands to benefit from the growth in the more profitable mass market sector in Macau, especially when its new Studio City resort and a fifth hotel tower in the City of Dreams complex come on line.In its half-year earnings report, the company notes that the mass market sector now accounts for 34.1 percent of market-wide gross gaming revenues, compared to 28.3 percent for the same period in 2013.“Melco Crown Entertainment, with its large exposure to the mass market table games segment in the fast growing Cotai region, is well positioned to cater to this increasingly important, and more profitable, segment of the market,” it said.Studio City, which has a budget of $2.3 billion, is set to open in mid-2015. The fifth hotel tower at City of Dreams is progressing as planned and is anticipated to open in thefirst half of 2017, Melco said.During the first half, the group’s net revenues rose 4.8 percent to $2.56 billion. Net incomeattributable to Melco Crown Entertainment was $383.2 million, as compared to net income of US$234.8 million for the six months ended June 30, 2013.However, most of those gains came in the first quarter of 2014, as Q2 results reported earlier this month showed a deterioration.MCE reported that Q2 earnings per share fell 26 percent from the same quarter a year ago to 26 cents. Revenue slid 7.4 percent to $1.199bn, undershooting analyst estimates of $1.297bn. Melco CEO Lawrence Ho said that the shortfall was mainly due to slower VIP business, though this was offset by a 38 percent jump in mass market revenues. 

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