A note from Sterne Agee CRT on Monday stated that Melco Crown’s new Studio City is being hurt by continued disruptions going on next to the property.

While the U.S.-based brokerage said it still believes that Studio City is best positioned for the longer-term, “ongoing construction on both sides of the property combined with a relatively flattish (+2 percent QoQ) sequential revenue environment [will] likely stall a significant near-term property ramp [up],” according to Asia Gaming Brief.

Sterne Agee CRT said that Studio City’s 1Q16 property earnings before interest, taxes, depreciation and amortization (EBITDA) has been adjusted by the firm significantly, dropping it from $40.2 million to $22.6 million.

Studio City, the $3.2 billion Cotai Strip‘s Hollywood-themed leisure resort and casino celebrated its grand opening on October 27, 2015. The Melco Crown Entertainment property is known for its mass-market focus, which is in keeping with the government’s expectations that they focus on non-gaming attractions as they do with City of Dreams.

Currently, the property in the Cotai section of Macau doesn’t have any VIP gaming facilities, but a note from UBS analyst Robin Farley following its opening stated, “there might be some VIP action on the 2nd floor in the future.”

Melco Crown expects the US3.2 billion Macau project to attract more than 31 million in the coming years. During a period of extreme highs and lows experienced by the region’s casino market, MCE has invested US$10 billion in Macau.

Leave a Reply

Your email address will not be published.