MANILA: In a quarterly report to the Philippine Stock Exchange, the operator of City of Dreams Manila said it incurred a net loss of P288.5 million during the three months to June. This improved 84% from the P1.82 billion posted a year earlier. The Philippine unit of Hong Kong-listed Melco Crown Entertainment Ltd. cited the 68% increase in net operating revenues to P5.62 billion from P3.34 billion and the 20% decline in employee benefit expenses during the period.
The casino business contributed 91% of second-quarter revenues. Income from the segment rose 76% to P5.11 billion from P2.90 billion, following increases in rolling chip volume to P79.4 billion from P22.2 billion, and the contribution of mass market table games rising to P6.3 billion from P5.2 billion while that of gaming machines rose to P24.1 billion from P20.8 billion.
The number of table games and gaming machines averaged 268 and 1,626 compared with the 258 and 1,713 recorded a year earlier. Net win per table game and gaming machine also increased to P187,603 and P9,481 from P79,223 and P8,165 on average.
Revenues from the hotel segment amounted to P245.3 million, 81% above the previous year’s P135.7 million. Melco Crown cited the opening of more rooms for the higher income, primarily coming from Crown Towers Hotel, Nobu Hotel and Hyatt City of Dreams. In the second quarter, occupancy reached 90.9% in City of Dreams Manila while the daily rate and revenue per available room averaged P7,803 and P7,097.
Other non-casino revenues included P171.7 million from food and beverage along with P97.7 million from entertainment, retail and other operations. These declined from the P177.8 million and P124.2 million seen a year earlier due to lower ticket sales from the Family Entertainment Center.
The overall uptick in costs and expenses, however, offset the improvement in revenue generation during the second quarter.
Operating costs and expenses climbed 17% to P5.19 billion from P4.44 billion, reflecting a 17% increase in gaming tax and license fees to P1.39 billion from P580 million. Melco Crown also paid P386.3 million — almost double the P184.7 million incurred last year — to PremiumLeisure and Amusement, Inc. pursuant to a March 2013 operating agreement.
“The increase in operating costs was generally in-line with increased net operating revenues in the current quarter, partially offset by a lower employee benefit expenses,” the company noted, with the personnel-related cost declining 20% to P831.4 million from P1.04 billion.
In addition, Melco Crown booked P3.19 million in interest income, which settled 11% below the P3.61 billion recorded for 2015. It also gained P18.5 million from foreign exchange adjustments, reversing the P9.1 million lost a year ago.
Non-operating expenses, at the same time, rose 4% to P716.6 million for interest, and 7% to P16.4 million for amortization of deferred financing costs. Other finance fees remained flat at nearly P12 million during the period.
Year to date, Melco Crown remained in the red with a net loss of P1.42 billion although it managed to narrow by 60% the P3.49 billion loss incurred a year earlier.
The company said the better financial results were primarily related to improved operating revenues, lower employee benefit expenses, and net gain on the disposal of property and equipment although these were partially offset by the increase in gaming tax and license fees, payments to Philippine parties and interest expenses.