Boston, MA 08/08/2014 (wallstreetpr) – Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL) witnessed an 11-month low in the Hong Kong market after it posted lower-than-expected earnings. Melco said that the lower earnings were a result of impeached Taiwan branch charged with foreign-exchange violations.
Falling in Hong Kong and U.S. Markets
The Macau casino operator dropped down to HK$74 or 5.9% since September 2014 and also 4.9% in U.S. trading on ADRs. In the meanwhile, the Q2 adjusted property earnings before taxes, amortization, depreciation and interest went down 11% to $313.6 million, in contrast with the previous year. Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL) said that sink was a result of dropping high-stake gambling volumes as well as winning rates. The adjusted property earnings missed Bloomberg’s compiled analysts’ forecast of $358.5 million.
Mass Market Table Win per Day Growth Declining
Company’s mass market table win per day growth dropped down and reached a single digit in Q2 2014, even less than the average of above 40% from 2011 to 2013. In this context, an analyst at Morgan Stanley, Praveen Choudhary wrote that higher costs of staff and lower luck were affecting Melco’s numbers. However, he added, the primary reason for this was decreasing operating leverage.
Taiwan Branch Impeachment
The branch office of Melco in Taiwan has been impeached by Taipei District Prosecutors Office for allegedly violating foreign exchange laws as well as banking laws.
In response, Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL) added that the company shall defend this impeachment rigorously, as on the basis of Taiwan legal advice. Melco said that according to the company, the Taiwan operations were compatible with the Taiwan laws.
Melco’s Overseas Expansion Plans
The company is spreading its tentacles in the overseas market in the backdrop of labour constraints and land obstacles, to get back in the Portuguese colony. The company has already formed partnership with BELLE CORP (OTCMKTS:BLCNF) in order to develop a Manila resort. Belle has one out of four casino licenses in Philippines.
