Ho: Galaxy Phase II an expansion, Studio City a new resort

Melco Crown Entertainment is hoping to be rewarded when the time comes to determine the number of gaming tables permitted for the company’s new casino-resort Studio City. The question was raised on Friday during the conference call regarding the results of the company for the first quarter of 2015, and addressed to the CEO and Co-chairman Lawrence Ho Yau Lung because of the opening of Galaxy Phase II on May 27.
“Unfortunately, we are in the government’s hands. But we do believe that unlike Galaxy, which is really an expansion with additional hotel rooms, Studio City is the first integrated-resort to open in the city in the last three years”, he said. “Of course, the Galaxy table allocation is a telling indication for the potential of gaming tables for new properties. But we’re hopeful the Macau Government will really reward us with the contribution we have made over the years”.
Concerning the opening of Studio City, Lawrence Ho said that he was expecting it to open during the third quarter of the year and to cost US$3.2 billion (MOP25.6 billion), as planned. However, he opened the door for delay regarding the completion date of the resort.
“Studio City remains on budget and on schedule. We have done this [constructing resorts] quite a few times. Near the last mile, contractors are going to try to extort money from us. Given our very cautious focus we are going to hold very firmly [even] if it is going to take a bit longer”, Mr. Ho stressed. “We would much rather open this property in an improved market and still targeting the third quarter.
But given the scale of these projects, we are not going to put a gun to our own head”, he explained.
Confidence in Macau
During the first quarter of the year, Melco Crown’s adjusted property EBITDA (earnings before interest, taxes, depreciation, amortization) plunged 35 per cent to US$253.3 million (MOP$2 billion) from US$387.4 million (MOP3.1 billion) during same period last year. Notwithstanding this, the company is confident about the future of the Special Administrative Region.
“In Macau, we continue to face challenges associated with the weak demand environment in all segments of the market. We remain confident that Macau’s geographical location, which is perfectly positioned to cater to the fastest growing and largest consumer middle class in the world, together with the anticipated addition of multi-dimension attractions and amenities, will ensure in the long term a sustainable and economic growth model”, Mr. Ho stressed.
In spite of the uncertainty arising from the policies of the new government, mainly regarding the smoking ban and cap on tourists, Lawrence Ho praised the government’s new attitude.
“The positive side is the government has engaged us. They understand that gaming companies are some of the key stakeholders in terms of contributing to government taxes and the fact that we employ a big proportion of the local workforce”, he stated. “Like everybody else, we’re looking forward to hearing how these policies are going to be implemented, rather than [just the] smoking ban or the cap on total tourist numbers”.
Lawrence Ho also revealed that the last jobs fair run by the company to find staff for Studio City resulted in approximately 7,000 applications.
J.S.F.