* Net income $104.9 mln ahead of $103.3 mln estimate
* Philippines casino to open in 2014
* Macau gaming revenue expected to pick up in 2013
HONG KONG, Nov 7(Reuters) - Melco Crown Entertainment posted a 4 percent drop in third quarter revenues due to lower volume in Macau’s lucrative VIP market that depends on high-stake gamblers.
The Macau casino venture, owned by Australian billionaire James Packer and Hong Kong businessman Lawrence Ho, on Wednesday reported net income slipped 7 percent to $104.9 million from $113.3 million last year.
Melco is one of six licensed operators in the world’s largest gambling market.
The decline year on year, which was better than a forecast $103.3 million according to Thomson Reuters data, was due to an amortisation of land use rights at the company’s upcoming Macau casino known as Studio City and development costs for its Philippines casino project.
Macau, an hour from Hong Kong by ferry and the only place in China where casino-gambling is legal, has been hurt by slowing Chinese economic growth. This has particularly been the case for the high-roller VIP segment, on which casinos rely for more than 70 percent of their overall revenue.
High volumes in Melco’s mass market segment helped to offset weakness in the lucrative VIP segment.
Ho, son of Macau casino mogul Stanley Ho, said on a conference call to analysts he expected gambling revenue growth to pick up next year once the new Chinese leadership transition takes place, expecting more flexible measures on sectors such as real estate.
Macau’s October gambling revenue hit a record, government data showed this week.
Melco, the owner of the strobe-lit City of Dreams casino and sleek Alteria property, is on track to open its Studio City resort in mid 2015, Ho said.
The company on October 25. said it finalised plans for its foray into the Philippines, which sees Packer and Ho join forces with one of that country’s wealthiest men -- Henry Sy, the owner of local conglomerate SM Investments.
Melco’s total investment exposure will be close to $600 million for the project. Melco is currently the only Macau casino operator venturing into the Philippines.
Analysts polled on Thomson Reuters Eikon remain bullish on Melco with seven rating it a “strong buy” or “buy”. There are two “hold” ratings and no sell ratings.
Melco will embark on roadshows to showcase a potential senior global high-yield bond with an indicative size of $825 million, slightly larger than the $800 million expected, Thomson Reuters IFR reported on Wednesday. (Reporting by Farah Master; Editing by Mike Nesbit)