Publishing & Broadcasting Ltd’s Asian casino joint venture has played down fears the construction of its USD 2.1 billion (AUD 2.6 billion) City of Dreams complex in Macau has got off to a rocky start, after reporting a USD 73.5 million full-year loss.
Melco PBL Entertainment warned that its plans to capture a big slice of the world’s largest casino centre could prove more costly, after revealing the costs of the soon to open 36-storey Crown Macau had blown out 13 per cent to USD 584 million. The loss was largely a result of the development of its two Macau casinos.
Despite noting the additional costs were a result of „conscious and considered“ changes to expand the scope of its projects, the joint venture conceded the higher cost of building materials and construction in Macau could have an effect on future projects.
„We’ve indicated that we’re operating in the context of increasing construction and service costs in Macau and obviously we try to … forecast those and mitigate against inflationary pressure as much as we can,“ Melco PBL chief financial officer Simon Dewhurst told a phone hook-up over the weekend.
However, Melco PBL said the growth of gaming revenue and tourism in the former Portuguese enclave could offset any cost blowouts. Mr Dewhurst said the group was already considering possible additions to the City of Dreams project, which will house 450 gaming tables, 1500 gaming machines, an „upscale“ shopping mall and a 1600-room five star hotel.
He said the group was looking at a „range of entertainment options“. Crown Casino in Melbourne, by comparison, has 350 gaming tables.
While conceding the project had experienced a hiccup or two, Melco PBL chief executive Lawrence Ho said: „The team is very confident of delivering the City of Dreams at the end of 2008.“
The casino is being constructed by Leighton Holdings, which recently completed the Wynns project in Macau.
„Sadly, it’s true that [the head] design director was transferred back to Melbourne.
„Having said that, this is a personal matter and a confidential one,“ said Mr Ho. He declined to say what the problem was but did talk up the merits of the new head designer, who was behind the construction of the Sands Macau project.
„We are very confident that he’s a very capable individual,“ he said. „The program is on track.“
Crown Macau is due to open on May 9.