Casino resort Studio City is likely to post earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$253 million in 2017, forecasts Morgan Stanley Asia Ltd.
Analysts Praveen Choudhary and Alex Poon wrote in a Sunday note that Studio City’s EBITDA “should grow faster than the market in 2017, driven by management change and addition of VIP business in November 2016.” Mr Choudhary and Mr Poon added that they expected Studio City (pictured) – located in Macau’s Cotai district – to display “continued improvement” in the next few quarters.
Studio City is 60-percent owned by Asian casino operator Melco Crown Entertainment Ltd. The latter announced in January several key executive appointments. The firm also announced a new leadership structure, with a president for each of the company’s Macau properties.
In September last year, Melco Crown hired David Sisk, a former chief operating officer for Macau casino operator Sands China Ltd, as president of Studio City.
At the time of the property’s opening in October 2015, Melco Crown’s chief executive, Lawrence Ho Yau Lung, had said not having VIP gaming there was a “business decision”, driven mainly by the size of the gaming property’s new-to-market allocation of 250 tables from the Macau government.
The company eventually revised its strategy and introduced VIP gaming to Studio City in November last year. That included self-run VIP operations and third-party promoted VIP rooms, respectively by Macau junket operators Suncity Group and Tak Chun Group.
Morgan Stanley forecast in its Sunday note that Studio City was likely to post full 2016 EBITDA of US$158 million.
The brokerage said it expected the property to record gross revenue of approximately US$1.28 billion in 2017.
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