Shun Tak, which has interests in the sea and air transport, hotel and real estate sectors, also said that the number of passengers carried on the Hong Kong-Macau route was 14 million, which was a year-on-year rise of 15 percent.

In 2007 Macau received 27 million tourists, which was a rise of 22.7 percent on 2006.

Shun Tak’s transport division posted a profit of US$33 million, which was a rise of 9.5 percent against 2006.

Shun Tak has a 15.8 percents take in Sociedade de Turismo e Diversões de Macau (STDM) which owns 80 percent of Sociedade de Jogos de Macau (SJM) which controls 19 of the 29 casinos in Macau.

At the beginning of the month SJM announced profits of US225 million in 2007, which was a fall of 20 percent against 2006.

With permission :: Macau Daily Times

• Ho family influence in Macau gaming is not abating
• Stanley Ho Hits IPO Roadblock
• Macua Gaming Revenue in 2006 Up 22%
• Dr Stanley Ho Sold US$130 Million Melco Shares
• Macau First Half 2008 Gaming Revenue Up By Whopping 40%

The Hong Kong-listed company said its net profit in the 12 months ended Dec. 31 was HK$2.69 billion (US$346 million; ?219 million), down from HK$2.84 billion in 2006.

Melco ? controlled by Lawrence Ho, son of Macau gaming magnate Stanley Ho said revenue rose 27 percent to HK$1.02 billion (US$131 million; ?83 million) from HK$801 million.

The company’s board proposed a final dividend of HK$0.01 (US$0.001; ?0.0008) per share, unchanged from a year earlier.

Melco booked a gain of HK$3.1 billion (US$398 million; ?252 million) from the listing of unit Melco PBL Entertainment Macau Ltd. (MPEL) in the U.S. in December 2006.

Melco PBL is one of six licensed casino operators in Macau, the only place in China where casino gambling is allowed.

• Melco PBL Losses Narrows Thanks to Crown Macau
• Las Vegas Sands 2-Q profit up 27%
• SJM to Develop Six More Macau Casinos, Including Cotai Strip
• Melco PBL 2006 Losses Widenend
• Macau’s Biggest Slot Machine Supplier Profit Up By 20%

GDP of Macao for 2007 was estimated at US$19.20 billion, up by 27.3% in real terms and the per-capita GDP amounted to US$ 36,357. GDP for the fourth quarter of 2007 recorded an increase of 22.1% in real terms; meanwhile, the rates for the first and second quarters were revised downward from 25.7% and 31.6% to 25.2% and 30.8% respectively, but that for the third quarter was revised upward from 30.9% to 32.2%; for 2006, the rate of growth maintained at 17.0%.

The favourable factors that contributed to Macao’s relatively high economic growth in 2007 included:

- the continuous increase and improvement in the gaming and tourism facilities, rising number of visitor arrivals led the annual gross gaming revenue (excluding gratuities) soared significantly by 45.8% compared with 2006;
- the bright prospects for the prosperous gaming and tourism sector boosted the investment up by 23.0% in real terms over 2006;
- the annual number of visitor arrivals rose by 22.7% to 26,992,995, together with the increases in the per-capita spending of visitors in all quarters, total visitor spending (excluding gaming expenses) for 2007 registered a 13.9% growth in real terms;
- the notable increase in the employed population and employment income drove the annual private consumption expenditure up by 10.7% year-on-year in real terms.

Changes in the economic structure of Macao

As regards the economic structure, the following changes are observed in 2007:

- the 45.6% surge in the export of gaming services in 2007 fueled net exports of goods and services (exports of goods and services minus imports of goods and services) to accelerate at a faster pace than the level of overall economic growth, contributing to an apparent increase in the relative importance of net exports of goods and services, from 38.3% in 2006 to 43.3% in 2007;
- investment (gross fixed capital formation + changes in inventories) went up by 23.0% in 2007, lower than the overall economic growth, bringing its relative importance in GDP down from 27.5% in 2006 to 26.5% in 2007;
- although increases were registered in both private consumption expenditure and government final consumption expenditure, yet the rates of growth were lower than that of the overall economy. In consequence, the relative importance of private consumption expenditure in GDP went down from 26.2% in 2006 to 22.8% in 2007, while that of government final consumption expenditure decreased from 8.1% to 7.4%.

Photo 1

Photo 2

Courtesy: Macau Statistics and Census Service

• Macau 2005 GDP Grows at 6.7%
• Macau Q1 2008 Gross Domestic Product Expands by 31.6%
• Macau’s GDP rises 18.8 percent in first quarter of 2006
• Macau Investment Forum to be Held 21-22 February 2008
• Macau Tourist Price Index Up By 3.63%

In December 2007, average earnings (excluding bonuses and allowances) for full-time employees in the Gaming Industry rose by 6.6% year-on-year to US$1,862. Average earnings for employees in positions that are directly related to betting services stood at US$1,867, up by 2.0% over December 2006. The average earnings for services and sales workers, including casino and slot machine attendants/hosts, security and surveillance workers, etc., increased by 10.9% to US$1,119.

At the end of December 2007, the Gaming Industry reported 3,411 vacant posts, a decrease of 2,220 from a year earlier. Of these vacancies, 1,685 were for hard and soft count clerks, cage cashiers, pit bosses, casino floorpersons, dealers, betting service operators, etc., while 994 vacancies were for services and sales workers.

In terms of recruitment prerequisites, 62.7% of the vacancies required no working experience; 94.8% required junior secondary or higher education. Besides Cantonese, other preferred language skills were Mandarin (75.5%) and English (50.7%).

Courtesy :: Macau Statistics and Census Service

• Macau Hotel Employment Surges By 57.8%
• Number of Hotel and Entertainment Employees On the Increase
• Macau Labour Force Increases by 11,300 More
• Macau Unemployment Rate Down to 3.7%
• Macau’s Biggest Slot Machine Supplier Profit Up By 20%

City of Dreams Complex

According to the Daily Telegraph, Crown Macau owned by Melco PBL Entertainment, James Packer’s first casino foray in the city had a rocky start after its opening in May last year.

But its fortunes have been given a major boost as a result of a strategic deal late last year with a Hong Kong-listed junkets operator, A-Max, and the decision to refocus the casino entirely on the VIP market.

The aggressive deal with A-Max, which involves higher than industry average total commissions of up to 1.35 per cent, has helped bring VIP gamblers to the upmarket casino, taking market share off more experienced operators, such as Macau veteran Stanley Ho and new players Galaxy and the Macau Sands.

“Thanks to A-Max’s junkets, Melco PBL’s market share improved substantially from 5.7 per cent in November to 18.1 per cent in February, making Crown Macau the busiest casino in the world in terms of betting volume,” Credit Suisse’s Hong Kong-based gambling analyst, Gabriel Chan, says in a bullish new report on the company.

“If we focus on market share in the high-roller segment alone, the improvement was even more astonishing with market share increasing from 6.6 per cent in November to 24.8 per cent in February.”

“A-Max junkets generated about $US5.3 billion ($5.8 billion) in rolling chip turnover in February, up about 5 per cent month on month,” he said.

“In our view, there is room for further growth.

“We expect A-Max’s junkets to generate on average $US6.3 billion rolling chip turnover per month in 2008.” Packer’s Crown now has a 37.9 per cent stake in the company, which listed on the US Nasdaq market in late 2006, alongside the Hong Kong-based Melco, operated by Stanley Ho’s son Lawrence Ho.

Macau observers say the aggressive deal struck with A-Max has seen the junket operator bring in substantial new volumes of high-rollers to Crown Macau, which has been difficult for its rivals to match.

“There has been a dramatic shift in the market since December,” one Macau veteran said last week.

“Stanley Ho’s junket operators have been struggling. Galaxy has been losing market share as well.

“It has not been easy for them to find the consolidators who can bring in the same horsepower as A-Max.”

Under the deal, A-Max, a consolidator of junket operators, receives a total commission rate of between 1.2 per cent and 1.35 per cent from Crown.

A-Max in turn pays its junket operators up to 1.2 per cent.

In the past, Macau casino operators would only pay around 1.1 or 1.2 per cent in total to junket operators to bring in high-rolling gamblers to their premises.

Observers say the financial viability of the Crown Macau deal with A-Max, which involves a potentially higher total commission structure, is dependent on A-Max being able to deliver high volumes, which has so far been the case.

Macau gaming turnover continues to increase, with total monthly revenues twice the level of the Las Vegas strip in recent months.

Unlike last year, which saw a flood of new casino openings in Macau, 2008 is not expected to see any substantial new supply come on to the market, giving the existing operators a chance to consolidate their positions.

The past few months have also seen Crown enjoy an increase in its “hold rate”, or house percentage retained, which has also helped the success of its operations. “Crown’s hold rate was terrible,” said one observer.

“It used to be around 2.2 per cent on baccarat, but now it is 2.7 per cent.”

Crown’s success has put pressure on its rivals to increase the commissions paid to junket operators. As Chan notes in his report, the junket operators now have more bargaining power in Macau than the casino operators.

Chan says that Galaxy’s market share has dropped from 14.9 per cent in November to only 10.3 per cent in February.

“Galaxy has extended credits to select junket operators and raised its commission rate to 1.25 per cent, even higher than the 1.2 per cent A-Max is paying junket operators,” he notes.

The new competition from Crown has also prompted Sheldon Adelson’s massive Venetian, which opened in mid-2007, to revise its commission structure, a move which has helped to boost its market share by 2 percentage points to 12 per cent in February. The Venetian’s commission rate is now 1.26 per cent.

Chan predicts that Melco PBL’s earnings before interest, tax and depreciation could reach as high as $US280 million in 2008. “With a total construction cost of about $US570 million, we estimate Crown’s payback period to be only about two years,” he says.

• Crown Macau: the new VIP king
• Melco PBL Fails to Raise Much Needed Cash
• Crown Macau Winning With VIP Junkets Deals
• Melco PBL Just Short of Raising US$219 million
• Melco PBL Shares Tumbles 50%

He estimated that this year’s gaming revenue growth will be lower than last year, but as industry development keeps its momentum, a double-digit increase can be sustained this year.

(more…)

addthis_url = ‘http%3A%2F%2Fmacau.a2zcasino.eu%2Fmacau-casino-news%2Fmacau-gaming-revenue-this-year-to-hit-us125-billion%2F’;
addthis_title = ‘Macau+Gaming+Revenue+This+Year+to+Hit+US%2412.5+Billion’;
addthis_pub = ”;

• Macau Casino 2008 Revenues Projected to Hit Record US$12.5 Billion
• Macau Adding Up Big Gambling Debts
• Macau Casinos Have Best Security Systems in the World
• Paradise Casino Opens at Kam Pek Casino Macau
• Grand Lisboa to Double Texas Hold’em Tables

Deutsche Bank is managing the IPO. And of the shares on offer, 85 percent will be sold to institutional investors, 5 percent to employees and 10 percent to the public.

‘Fund managers said they are interested in the deal as SJM is a dominant player in [the] Macau gaming industry, but they are concerned how the company will deal with potential lawsuits from Winnie Ho, Stanley Ho’s sister.

The company plans to price the IPO before the Lunar New Year, which begins on Feb 7 this year.

• Galaxy Entertainment Has Sold 20% of It’s Business to Permira
• Melco sells shares to fund JV’s property purchase
• Dr Stanley Ho Sold US$130 Million Melco Shares
• Macau Property Opps Fund Plans AIM Listing On June 5
• Melco Gets Approval For NASDAQ Listing

Hold adjusted property EBITDA has grown each month during the third quarter, and we are excited by our continued progress in expanding the business. VIP rolling chip volume has shown excellent growth, progressing from US$1.375 billion in July to over US$2.5 billion for the month of October. Based on our estimation for the month of October, Crown Macau’s combined VIP and mass table game market share of the whole market was approximately 8%, continuing the positive growth trend and despite the introduction of a major new entrant into the market.

“We are very optimistic that we can continue to drive additional improvement at Crown Macau, as a result of our previously announced reconfiguration of the property to accommodate additional VIP capacity with a commensurate reduction in mass market and slot capacity. This reconfiguration reflects the positive reception Crown Macau has received from the market and complements our competitive advantage in the VIP segment driven by our market leading amenities and strong local relationships with junket operators.

“We believe that this reconfiguration will lead to significantly increased gaming activity at Crown Macau and an expansion of our already strong junket network. Our previously announced Gaming Promotion agreement with Ama International Limited has the potential to meaningfully accelerate this process, largely due to the working capital solution this agreement brings to the property. The physical reconfiguration of the property is scheduled for completion by December 1, and, pending satisfaction of certain conditions, we anticipate that full Ama operations will commence at Crown Macau by year end. Final table mix plans for the reconfiguration of Crown Macau is still being finalised. Following completion of the reconfiguration and based on our current plan, Crown Macau is expected to have approximately 187 VIP gaming tables, 57 mass market gaming tables, and 230 gaming machines.”

Company-wide Operating Results

Total revenue, net of rebates paid on rolling chip play, for the third quarter of 2007 was US$113.4 million, up from US$7.3 million in the third quarter of 2006. Results for the third quarter of 2007 include the operations of Crown Macau, which opened on May 12. The year over year revenue increase was driven primarily by the opening of Crown Macau.

Third quarter results also reflect the impact of the acquisition of the gaming sub-concession in September 2006, which resulted in a change in reporting of gaming revenues from the Company’s Mocha Clubs from a service fee basis prior to acquisition of the sub-concession, to gaming revenue based on net win after gaming taxes since the acquisition of the sub-concession.

Total group operating costs and expenses were US$159.7 million in the third quarter of 2007, up from US$16.9 million for the third quarter of 2006. The increase was largely attributable to the opening of Crown Macau and the commencement of amortization of the Company’s gaming sub-concession, increased amortization of land use rights for projects under development, and increased pre-opening, selling and marketing investment costs associated with the development of Crown Macau and City of Dreams. Pre-opening expense for the third quarter of 2007 was US$3.3 million, mainly associated with the final phase of opening of Crown Macau during July 2007.

Total non-operating income for the third quarter of 2007 was US$0.8 million, including US$1.9 million in interest income and US$1.0 million in net foreign exchange losses. Capitalized interest during the third quarter of 2007 was US$2.0 million.

The Company reported a net loss of US$45.2 million for the third quarter of 2007, compared to a net loss of US$7.7 million for the third quarter of 2006. Net loss per share for the third quarter of 2007 was US$0.037, compared to a net loss per share of US$0.015 in the third quarter of 2006.

Crown Macau 3Q Operating Performance

In the third quarter of 2007, net revenue at Crown Macau totaled US$97.6 million. Prior period comparisons are not available.

Adjusted EBITDA(1) at Crown Macau for the third quarter of 2007 was a deficit of US$10.4 million.

Our expected rolling chip table games hold percentage is 2.7%. In the VIP table games segment, rolling chip volume totaled US$4.8 billion for the third quarter of 2007. Actual rolling chip table games hold percentage (calculated before discounts and commissions) was significantly below expectation at 2.3%. Life-to-date of the property through November 13, rolling chip table games hold percentage is slightly below 2.5%.

In the mass market table games segment, drop (non rolling chip) totaled US$99.3 million and table-hold percentage was 17.4%. The expected range for mass market table games hold percentage is 16% - 18%.

Gaming machine handle (volume) was US$67.1 million and gaming machine revenue was US$4.2 million in the third quarter of 2007.

Total non-gaming revenue at Crown Macau in the third quarter was US$8.1 million. Occupancy in the third quarter of 2007 was 51.9% and the average daily rate (ADR) was US$233 per occupied room.

Mocha Clubs 3Q Operating Performance

Gaming revenue from the Company’s Mocha Clubs totaled US$19.8 million in the third quarter of 2007. Revenue for the third quarter of 2006, before the Company had acquired its gaming sub-concession, totaled US$5.7 million in the form of service fees received under the terms of a revenue-sharing service agreement with SJM, where the revenue share was calculated as 50% of net gaming revenues after deduction of Macau gaming tax at 39% of gross gaming revenue. On a pro forma basis (which assumes that the Mocha Clubs had operated under an owned gaming sub-concession during the third quarter of 2006), gaming revenue from the Mocha Clubs was essentially flat year-over-year, despite a reduction in the average number of gaming machines in service in third quarter 2007 as compared with third quarter 2006.

Mocha generated US$5.9 million of adjusted EBITDA(1) in the third quarter of 2007, which compares with US$1.1 million in the third quarter of 2006.

The Company’s seventh Mocha Club opened on October 3, 2007 at Mocha Square, a prime location in central Macau. It added approximately 130 gaming machines to our total existing installed base of gaming machines at Mocha Clubs. Additionally, the first phase of a two phase expansion of an existing facility at Hotel Royal opened in November and phase two is expected to open in January 2008. Taking into consideration both of these developments, Mocha Clubs is expected to have over 1,250 gaming machines by the end of January 2008.

In the third quarter of 2007, the number of gaming machines in operation at the Mocha Clubs averaged approximately 980 in six locations versus 1,015 in the third quarter of 2006. Average net win per gaming machine per day increased by 4.3% to US$220 from US$211 as compared with the same period last year. Over the same period, the total number of gaming machines in the Macau market as a whole more than doubled on a year-over-year basis.

Nine Month Results

For the nine month period ending September 30, 2007, the Company reported revenue of US$178.8 million versus US$18.2 million in the nine month period ending September 30, 2006. The year over year revenue increase was driven primarily by the opening of Crown Macau.

The Company reported a net loss of US$141.6 million for the nine month period ending September 30, 2007, compared with a net loss of US$20.5 million for the nine months ending September 30, 2006. The net loss per share for the first nine months of 2007 was US$0.117, compared to a net loss per share of US$0.041 for the year ago period.

City of Dreams Update

City of Dreams is on budget and remains targeted for opening by the end of March 2009. The initial phase opening will include substantially all of the 420,000 square foot casino and approximately 145,000 square feet of retail space, as well as the 370-room Hard Rock Hotel and Crown Towers Hotel, Cotai, with approximately 300 rooms, suites and villas.

The 1,000-room Grand Hyatt Macau hotel is scheduled to open in September 2009, and the 2,000-seat Theatre of Dreams is scheduled for completion in the first quarter of 2009. Opening night is expected before year-end 2009 following four to six months of rehearsals. The approximately 800 unit apartment hotel complex integrated within the City of Dreams footprint is expected to be completed by December 2009 and to be marketed in advance of project completion, subject to compliance with legal and regulatory provisions.

The main podium superstructure works are now over 84% complete and roughly 40% of the hard costs associated with the project have been let to contractors. The Hard Rock hotel tower and Crown Towers hotel tower construction works have both progressed to the 9th floor.

Macau Peninsula Project Update

The Company continues to review and develop its plans for development of the Macau Peninsula project. Those plans are subject to completing the acquisition of the site and certain conditions including meeting applicable Macau regulatory requirements.

Financial Position and Capital Expenditure

Cash and cash equivalents as of September 30, 2007, including restricted cash, totaled US$599.1 million. Total outstanding debt at the end of the third quarter was US$614.3 million, consisting of US$500 million from the draw down of the first tranche of our US$1.75 billion bank facility and US$114.3 million in loans from the Company’s two major shareholders. Total debt to shareholders’ equity ratio as of September 30, 2007 was 32%.

The Company priced its follow-on public offering at US$15.50 per ADS following market close on Wednesday, October 31. The offering comprised a public offering of 37,500,000 ADSs representing 112,500,000 ordinary shares with each ADS representing three ordinary shares of Melco PBL Entertainment. The Company raised roughly US$580 million in proceeds from this financing before fees.

Capital expenditure for the third quarter 2007 was US$163.6 million, bringing capital expenditure to US$560.2 million for the nine months ending September 30, 2007. Third quarter capital expenditure consisted of US$2.0 million for Crown Macau and US$157.5 million for City of Dreams. Total capital expenditure for City of Dreams in the first nine months of 2007 amounted to US$339.6 million.

• Melco PBL Makes First Time Profit on Crown Macau
• Melco PBL Losses Narrows Thanks to Crown Macau
• Wynn Macau Profits Good For Wynn Resorts
• A-Max Holding Reports US$155 Million Loss on Macau Business
• Melco PBL 2006 Losses Widenend

Total receipts of the gaming sector reached US$ 7.36 billion in 2006, of which the receipts from gaming services amounted to US$ 7.31 billion, an increase of 22% compared with 2005. Interest receipts totalled US$ 41.5 million.

Total expenditure of the sector amounted to US$ 3.82 billion, of which purchase of goods and commission paid rose by 20% over 2005 to US$ 2.14 billion; meanwhile, operating expenses and compensation of employees reached US$ 907.50 million and US$ 622.50 million respectively, up notably by 26% and 61% year-on-year.

Source: Statistics and Census Service

• Hotel Developments Spurs Growth in Macau
• Macau Construction Boom Shows no Signs of Abating
• Macau Q1 2008 Gross Domestic Product Expands by 31.6%
• Macau 2005 GDP Grows at 6.7%
• Macau 2007 Growth Domestic Product Up By 27.3%

Melco PBL yesterday announced it had raised another $US581 million in the US, $219 million less than the $US800 million it had hoped to raise. The banks managing the share sale — Deutsche Bank, UBS and Citigroup — have an option to buy $86 million stock in the next 30 days.

The new shares take proceeds from Melco PBL Entertainment’s listing on the US Nasdaq market to $2.2 billion, which will go towards building two casinos — City of Dreams and the Trinity — and a hotel in Macau, Asia’s gambling capital.

Together with Crown Macau, the company plans to have three casinos in Macau by 2009.

The share sale will water down the stake PBL owns in the Macau gaming venture to as much as 37.4 per cent, from 41.4 per cent currently. Melco will experience the same dilution.

The extra shares on issue pushed down the stock prices of Melco PBL Entertainment and PBL. PBL shares yesterday closed down 35¢ at $20.55 on the local exchange.

Hong Kong-based Credit Suisse gaming analyst Gabriel Chan said the shortfall indicated investors were wary because of market jitters triggered by poor results this week at larger Macau rival Las Vegas Sands.

Mr Chan said Melco PBL was willing to accept a $130 million shortfall in return for a speedy capital raising.

“I think they needed the money urgently,” he said, referring to the initial plans for the raising.

On Thursday Melco PBL shares closed down $US1.35 at $14.55.

• Melco PBL Had SuccesFul US$1.15 Billion Listing
• Melco sells shares to fund JV’s property purchase
• Melco PBL Shares Tumbles 50%
• PBL, on a roll in Macau, plans US float
• Melco Gets Approval For NASDAQ Listing