Melco’s losses widen to P970 M in Q1

MANILA, Philippines - The Philippine unit of Macau-based casino giant Melco Crown Entertainment Ltd. sank deeper in the red in the first quarter as expenses in its casino complex piled up.

In a regulatory filing, Melco Crown (Philippines) Resorts Corp. said net loss hit P970.06 million in the January to March period, nearly triple the P338.67-million loss a year ago.

Melco Philippines said it incurred losses due to “pre-opening costs, general and administrative expenses, as well as the interest expenses as a result of continuous development of City of Dreams Manila.”

“We are currently in the development stage, and as a result, there is no revenue and cash provided by our intended operations,” Melco Philippines said.

Melco Philippines recorded P21.33 million in revenues in the first quarter as management fee for the casino project.

The Macau-based casino giant is planning to start operations of its $1.3-billion City of Dreams Manila casino complex in October.

Its local unit earlier paid $35 million as rent to Belle Corp., the leisure arm of the SM conglomerate and the builder of the casino complex.

“As is typical for a development stage company, we have incurred losses to date and expect these losses to continue to increase until we commence commercial operations with the planned opening of City of Dreams Manila which is expected later this year,” Melco Philippines said.

When it opens in the third quarter, City of Dreams Manila will offer 365 gaming tables, 1,680 slot machines and 1,680 electronic table games. Previously, the casino planned to offer only 242 gaming tables and 1,450 electronic gaming machines.

It will be the second casino complex to open at the Philippine Amusement and Gaming Corp.’s 120-hectare Entertainment City, which is groomed to become the Philippines’ version of the Las Vegas strip. In March last year, port mogul Enrique Razon opened the $1.2-billion Solaire Resort and Casino.

The integrated casino project is Melco Crown’s first gaming foray outside Macau where it operates the City of Dreams and Altira Macau casinos. City of Dreams Macau is famous for its world-class gaming and entertainment offerings including the The House of Dancing Water Show and party place Club Cubic.