Earnings by Ray Poirier | Melco Crown Entertainment Ltd. (MPEL), whose entire gaming operations are in Macau, reported its third quarter loss had narrowed from the previous year but still failed to meet analysts’ expectations.
During the period that ended on Sept. 30, the company said revenues had more than doubled to $295.2 million from last year’s $113.3 million and that losses had totaled $21.1 million or $0.05 per share compared with a net loss of $45.2 million or $0.11 in 2007.
Analysts had expected the company to report a loss no greater than one cent per share on revenue of $348 million.
The improved performance, the company said, was related to greater activity at its Crown Macau Casino Resort.
Lawrence Ho, company co-chairman and CEO, expressed concern about the current operating environment. He said market conditions "remain challenging" but felt that an impending cap on commission rates paid to junket operators who bring in VIP customers will help Crown Macau’s competitive position in the marketplace.
Ho, son of gambling mogul Stanley Ho, formed Melco Crown Entertainment with James Packer, son of the late publishing and gambling billionaire, Kerry Packer. He said the company is working on initiatives to reduce overhead without sacrificing the experience of guests. He expects the effort to create cost savings of roughly $25 million on an annual basis.
As for the company’s liquidity, he said, "Our capital raising efforts in 2007 in both the equity and debt markets have put us in a strong position relative to most of our peers in the industry. Phases I and II of City of Dreams are fully funded, and the project remains on timetable to open Phase I in the first half of next year."
Following the financial report, the company announced that COO Garry Saunders had submitted his resignation for personal reasons. No successor was named immediately.