Casino operator Melco Resorts and Entertainment Ltd saw its net loss widen to US$243.8 million in the third quarter of 2022, compared with a net loss of US$233.2 million a year earlier. The net loss was down 3.1 percent from the second quarter this year, according to the firm’s results filed in the United States on Wednesday.
Total operating revenues for the third quarter this year were US$241.8 million, down 45.8 percent from the prior-year period.
The decrease was “primarily attributable to the government mandated temporary closure of our casinos in Macau in July and heightened travel restrictions in Macau and mainland China related to Covid-19 during the quarter,” said the company. Those constraints “led to softer performance in the rolling chip and mass market table games segments,” it added.
All casinos and gaming areas in Macau were closed for 12 days in July as part of countermeasures against a local community outbreak of Covid-19.
Melco Resorts generated negative adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$34.9 million in the three months to September 30, compared with a positive figure of US$31.9 million in the third quarter of 2021.
The company had reported negative adjusted property EBITDA of US$13.8 million for the second quarter this year.
“Our results for the third quarter of 2022 were impacted by the casino closures in July and the travel restrictions imposed across mainland China and Macau,” said Lawrence Ho Yau Lung, the group’s chairman and chief executive, in prepared remarks accompanying the results.
“Following the reopening, the operating environment remained challenging given the continuing tight travel restrictions, but we are encouraged by the recent reopening of Macau to international tourists from designated countries as well as the increase in visitation over the October Golden Week,” stated Mr Ho.
Electronic applications on visas, group tours
“We are also cautiously optimistic that the granting of e-visas and group visas [in mainland China], which commenced on November 1, 2022, will lead to a gradual increase” in the number of visitors to Macau, he added.
Those were references respectively to the return of electronic issuance of visas for Macau trips by mainland China residents, and of group tours from the mainland.
During the accompanying conference call, Mr Ho described those moves as the “best news we have heard in the past two-and-a-half, three years.”
But he added that China being a “huge” country, and having had Covid-19 outbreaks recently, meant it took time for such an easing measure to “trickle down to the provincial and city level”.
The group’s chief operating officer, David Sisk, added that the firm’s customers “were very enthusiastic” about Macau, and “anxious to come back”.
Melco Resorts’ chief financial officer, Geoff Davis, said on the call with investment analysts that third-quarter daily operational expenditure in Macau was down to US$1.6 million, from US$1.7 million in the second quarter. He acknowledged that spending-wise, the company had benefitted from the 12-day closure of the firm’s gaming venues in Macau.
At the group’s Macau flagship, City of Dreams (pictured), on Cotai, total operating revenues in the third quarter this year were US$66.4 million, compared to US$252.0 million a year earlier. The property generated negative adjusted EBITDA of US$40.2 million, compared with adjusted EBITDA of US$32.7 million in the third quarter of 2021.
VIP rolling chip volume at the property was US$332.2 million for the third quarter of 2022, versus US$2.79 billion in the third quarter of 2021. Mass-market table games drop decreased to US$133.5 million in the reporting period, compared with US$617.7 million in the prior-year period.
Total non-gaming revenue at City of Dreams in the third quarter of 2022 was US$19.3 million, compared with US$39.5 million a year ago.
Manila boost
At City of Dreams Manila, a casino resort in the Philippine capital, total operating revenues were US$102.6 million, compared to US$52.5 million in the third quarter of 2021. The complex generated adjusted EBITDA of US$41.4 million in the third quarter of 2022, compared with adjusted EBITDA of US$11.7 million in the comparable period of 2021.
City of Dreams Manila has been able to operate at 100 percent capacity since March amid easing of Covid-19 restrictions there.
VIP rolling chip volume at that property was US$513.2 million in the third quarter of 2022, versus US$25.3 million a year earlier. Mass-market table games drop increased to US$153.3 million, compared with US$82.0 million in the third quarter of 2021.
Mr Ho said gaming volumes in the Philippines “continue to track towards pre-pandemic levels”. He added: “We expect to see further growth as travel restrictions around Asia continue to be lifted and travel returns to more normal levels.
The Melco Resorts CEO reiterated that the launch of the second phase of its majority-owned Studio City casino resort in Macau is only to begin in the second quarter of 2023, and was likely to be in stages.
“We will monitor the market closely to determine the appropriate time to open and currently anticipate the opening to be conducted in stages beginning in the second quarter of 2023,” he stated.
In Cyprus, the City of Dreams Mediterranean casino resort “is expected to open in the second quarter of 2023, subject to regulatory approvals,” added Mr Ho. Hotel room bookings for the under-development property can now be made for stays commencing June 1, 2023 onward, according to a check by GGRAsia of the property’s official online booking platform.
