Hong Kong-listed Melco International Development Ltd has confirmed it will launch a temporary casino facility in Cyprus this year.
Late last year the firm – which is also majority owner of Macau casino operator Melco Resorts and Entertainment Ltd – increased to 75 percent its share in a consortium awarded an exclusive casino licence by the Republic of Cyprus, which controls the ethnic Greek portion of that Mediterranean island.
In January the firm flagged it would have a temporary gaming facility prior to the main venue launching in 2021, but didn’t mention a time frame. Local media reports had said the interim casino might launch in June this year.
“In 2018, we will commence operating a temporary casino facility while we work towards a 2021 targeted opening for the permanent integrated casino resort,” said Melco International’s chairman Lawrence Ho Yau Lung (pictured in a file photo), in comments in the annual report filed on Thursday.
Mr Ho said the group hoped also to be able to “secure a gaming licence in Japan”.
Melco International has been – since February 2017 – majority owner of Nasdaq-listed Melco Resorts, which Mr Ho also chairs. Melco Resorts operates several large-scale casino complexes in Macau and one in the Philippines, and is a suitor for a permit in Japan’s casino liberalisation process. As of December 31, Melco International held a 51.22-percent stake in Melco Resorts, said Thursday’s filing by the parent.
Mr Ho also stated in Melco International’s results that while infrastructure improvements in the tourism markets in Macau and the Philippines were likely to support gaming industry growth in those places, he was “conscious of our exposure to stricter capital controls in mainland China and ongoing structural changes in the consumption of outbound Chinese tourists in all markets and particularly Macau.”
He added: “We will closely manage against these risks, supported by our strong financials, management team, and laser-sharp focus on building a sustainable advantage for the long term.”
Melco International stated in its announcement to the Hong Kong Stock Exchange that in 2017 its group profit declined 95.4 percent, year-on-year, to HKD474.1 million (US$60.4 million), from just under HKD10.37 billion in 2016. It said the fall was mainly because in 2016 the group had benefited from a “one-off gain on deemed disposal of previously-held interest in an associate,” amounting to nearly HK$10.39 billion. That related to the purchase by Melco Resorts of shares previously held in a legacy business – Melco Crown Entertainment Ltd – by a unit of Australian casino operator Crown Resorts Ltd. The purchase and cancellation of those shares by Melco Resorts benefited Melco International.
Notwithstanding the contraction in 2017 profit, the parent group’s board recommended the payment of a final dividend of HKD0.04 per share, an aggregate payout of approximately HKD61.5 million, for the year ended December 31. It is likely to be paid on July 4.
Full-year net revenue at Melco International grew by more than 70 percent, to nearly HKD41.2 billion, from nearly HKD23.9 billion in 2016. Adjusted group earnings before interest, taxation, depreciation and amortisation were HKD9.8 billion, up by more than 80 percent compared to the HKD5.3 billion achieved in the prior year.
The 2016 results had reflected approximately eight months of consolidated results from Melco Resorts, compared to a full year of such consolidated results in 2017, stated Thursday’s filing.
Brokerage Sanford C. Bernstein said in a Thursday note on Melco Resorts that there had been a “turnaround” in business at its flagship Cotai resorts City of Dreams Macau, after it had lagged the market in 2017.
The launch at that venue of the Morpheus hotel tower – which Melco Resorts is still saying will be in the first half this year – would “expand the property’s room base by approximately 50 percent,” leading to improvement in the volume of gambling by premium mass players,” said analysts Vitaly Umansky, Zhen Gong and Cathy Huang.
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Analyst at Roth Capital Partners