Studio City Finance sinks further to a $20.5m net loss

Costs climbed on increasing operations and development.

For the third quarter of 2013, Studio City Finance announced that it had a net loss of $20.5 million, an increase of $16.5 million from a net loss of $4.0 million for the third quarter of 2012, primarily due to its continuous development on Studio City, resulting an overall increase in our operating costs as well as an increase in interest expenses, net and other finance costs.

Amortization of land use rights expenses for the third quarter of 2013 were $3.0 million, in-line with the same period in 2012. Pre-opening costs for the third quarter of 2013 were $0.7 million, compared to $0.8 million incurred for the third quarter of 2012.

Interest expenses, net for the third quarter of 2013 were $9.7 million. The net interest expenses mainly represented $17.5 million interest expenses incurred for the Studio City Notes issued in November 2012 and $1.0 million interest expenses on Studio City land use right payable, offset in part by the interest capitalization of $8.8 million associated with the Studio City construction and development projects.

Other finance costs for the third quarter of 2013 of $6.7 million, included $0.4 million of amortization of deferred fi nancing costs associated with the Studio City Notes issued in November 2012 and loan commitment fees of $6.3 million associated with the Studio City Project Facility.

For the nine months ended September 30, 2013, we had a net loss of $64.6 million, an increase of $56.7 million from a net loss of $7.9 million for the nine months ended September 30, 2012, primarily due to our continuous development on Studio City, resulting an overall increase in our operating costs and expenses relating to amortization of land use right as well as an increase in interest expenses, net and other finance costs.

Amortization of land use rights expenses for the nine months ended September 30, 2013 were $9.1 million, an increase of US$3.3 million from US$5.8 million incurred for the nine months ended September 30, 2012. The increase was primarily due to the amended Studio City land concession contract in July 2012.

Pre-opening costs for the nine months ended September 30, 2013 were $2.1 million, compared with $2.0 million incurred for the nine months ended September 30, 2012. Interest expenses, net for the nine months ended September 30, 2013 were $34.4 million. The net interest expenses mainly represented $53.5 million interest expenses incurred for the Studio City Notes issued in November 2012 and $3.4 million interest expenses on Studio City land use right payable, offset in part by the interest capitalization of $22.5 million associated with the Studio City construction and development projects.

Other finance costs for the nine months ended September 30, 2013 of $18.0 million, included $1.1 million of amortization of deferred fi nancing costs associated with the Studio City Notes issued in November 2012 and loan commitment fees of $16.9 million associated with the Studio City Project Facility.