Philippine casino operator Melco Resorts and Entertainment (Philippines) Corp reported a net loss of almost PHP2.41 billion (US$49.5 million) for the second quarter of 2020. That compared with net income of PHP1.14 billion a year earlier.
The firm operates the City of Dreams Manila complex (pictured) at Entertainment City in the Philippine capital Manila. The company is a subsidiary of U.S.-listed casino operator Melco Resorts and Entertainment Ltd, in turn controlled by Hong Kong-listed Melco International Development Ltd, led by Lawrence Ho Yau Lung.
Total operating revenues at City of Dreams Manila were PHP387.2 million, down from PHP9.17 billion in the second quarter of 2019, according to separate filings over the weekend by Melco Resorts and Melco International, respectively. The decline was said to be “a result of the temporary closures of business and imposition of prohibition measures” related to the Covid-19 pandemic.
City of Dreams Manila recorded negative adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of PHP1.11 billion for the three months ended June 30, compared to PHP4.29 billion in the prior-year period.
Despite being officially shut since March 16, City of Dreams Manila still recorded casino revenue for the period between April and June. That was after being allowed to do a ‘test run’ of the casino, authorised by the local regulator, the Philippine Amusement and Gaming Corp (Pagcor). Other casinos in Manila had previously reported being granted a similar authorisation.
Melco Resorts stated in its filing that the regulator had allowed the City of Dreams Manila casino “to undertake a dry run/trial run of its gaming and hospitality operations with only a limited number of participants.” The company added the ‘dry run’ “aimed to address all potential operational concerns to achieve a seamless reopening for City of Dreams Manila”, once all relevant Covid-19-related countermeasures were lifted in the Philippine capital.
Melco Resorts added that the ‘dry run’ at City of Dreams Manila was suspended from August 3, as the Philippines authorities imposed stricter Covid-19-related countermeasures for Metro Manila.
According to information disclosed by Melco Resorts, City of Dreams Manila posted casino revenues of PHP291.4 million for the three months ended June 30, as compared to PHP7.51 billion a year before. The 96.1-percent year-on-year decrease “was primarily due to lower gross gaming revenues of PHP10,410.7 million as the imposition of travel restrictions, temporary business closures and other measures taken by the Philippines and other countries throughout the world significantly disrupted the group’s operations.”
Rolling chip volume for the three months ended June 30 was PHP7.3 billion, as compared to PHP98.8 billion in the second quarter of 2019. Mass market table games drop stood at PHP0.4 billion for the period, as compared to PHP10.0 billion for the three months ended June 30, 2019.
Gaming machine handle for the second quarter of 2020 was PHP1.5 billion, down by almost 97 percent in year-on-year terms.
An extensive lockdown for the region, including its large-scale casino resorts in Entertainment City, was first announced in mid-March, and subsequently extended in increments. On August 3 August, the local authorities said that Metro Manila would return to a stricter anti-Covid-19 lockdown, known as “modified enhanced community quarantine” at least until August 18.
During the pandemic crisis, Metro Manila had already at one stage been under an enhanced community quarantine. That was then eased to modified enhanced community quarantine, and then further relaxed to general community quarantine.
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”Month-to-date [in October], we are encouraged that our properties have crossed property-EBITDA break-even levels, led by the recovery in the premium segments”
Chief executive and president of MGM Resorts