Last year’s net loss amounted to 9.14 billion pesos (US$200 million) versus a net loss of 6.3 billion pesos (US$ 140 million) in 2014.
The Philippines.- Melco Crown Philippines casino shows net losses in 2015 widening by 45 percent to 9.14 billion pesos (US$200 million) from 6.3 billion pesos (US$ 140 million) in the previous year.
Melco explained that the loss for the 2015 year was due to an increase in operating costs and expenses from Melco Crown Philippines casino’s first full year of operations. There are still high hopes for the facility, which is the second of four casinos planned for the Entertainment City precinct built on 120 hectares of reclaimed land, but it remains unclear if the Asian country can compete with rivals around the region including Australia.
The property comprises three hotels, including Crown Towers, 1700 poker machines, 380 gaming tables and cost over US$ 700 million to build. Casino revenues grew to 11.9 billion pesos (US$260 million) from 300 million pesos (US$6.5 million) reflecting the short trading period in 2014, whilst net operating revenue rose to 13.7 billion pesos (US$300 million) from 430 million pesos (US$9.3 million.) Melco owns two-thirds of the Manila casino, in partnership with Filipino developer and billionaire Henry Sy’s Belle Corporation.
During the company’s results meeting in February Lawrence Ho, Melco chief executive, said that even though he was happy with the progress of City of Dreams, he hopes infrastructure constraints would be fixed this year. He also noted the casino operator is being cautious on its VIP exposure given Manila’s credit history.
“I think some of the macro problems in Manila are not dissimilar to what we face in Macau, which are kind of infrastructure led issues,” said Ho. “I think unlike some of our competitors, we’ve been much more cautious in terms of giving out credit and expanding in the VIP market. Because over the course of Melco Crown’s history, I think we’ve developed a very good independent credit committee system and I think some of the decisions that were given to the credit committee we just couldn’t pass it given what was involved in the credit history involved in Manila. So we’re still approaching the VIP part, which effectively supercharged that market pretty cautiously.”