Macau Casino operator Melco PBL Entertainment (Macau) Ltd. has said that its 2006 loss widened, as costs rose ahead of two new casino projects.
Hong Kong-based Melco, which went public on the Nasdaq in December, reported a net loss of US$73.5 million, or 12 cents a share, in 2006, compared with a loss of US$3.3 million in 2005.
Revenue more than doubled to US$36.1 million, due in part to a change in reporting of revenue at its Mocha Clubs unit.
Operating costs for the year rose to US$93.8 million from US$21.1 million in 2005.
The company said it expects to open its Crown Macau Hotel Casino on May 9, while construction is continuing on its City of Dreams located on the Cotai Strip section of Macau, the only place in gambling-mad China where casinos are legal.
Melco’s shares trade at a premium to Wynn Resorts Ltd and Las Vegas Sands Corp, which also operate casinos in Macau, JP Morgan analyst Harry Curtis said in a research note.
However, given the high short interest in the name, if Crown opens well, and the strength looks sustainable, we’d expect upside in the stock from short covering,” he said.
Shares of Melco were up 22 cents, or 1.4 percent, in late trading on Nasdaq.
Melco is a joint venture between Hong Kong’s Melco International Development Ltd and Australia’s Publishing and Broadcasting Ltd.
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