GGRAsia – Melco Intl to open Yokohama office, build up Japan presence

Melco Intl to open Yokohama office, build up Japan presence

Sep 02, 2019 Newsdesk Japan, Latest News, Macau, Top of the deck

Global casino investor Melco International Development Ltd says the group will soon open a third office in Japan, this time in the city of Yokohama (pictured), the country’s second-largest metropolis by population. The group already has offices in Tokyo and Osaka.

“Japan continues to be the group’s core focus,” said Melco International in a Friday filing to the Hong Kong Stock Exchange.

“With offices in Tokyo and Osaka and an upcoming one in Yokohama along with a local [Japan] leadership team, the group is now fully engaged to explore local partnerships and to further build up our local presence,” it added.

The mayor in the city of Yokohama publicly declared last month – for the first time – support for getting a casino resort there. “We must look to Yokohama’s future, the 20 to 30 years ahead,” Fumiko Hayashi reportedly stated. “I’ve come to the conclusion that in order to achieve growth and development, we need integrated resort (IR),” she added.

Lawrence Ho Yau Lung, Melco International’s chairman and chief executive, was quoted in the filing as saying that the group was “dedicated” to becoming an international IR operator in Japan.

“In the past few months, we have released designs of our proposed Osaka integrated resort and participated in the Yokohama’s request-for-information and Osaka’s request-for-concept,” said Mr Ho.

He added his firm believed it was in a “strong position to be a partner” regarding “Japan’s journey” toward the creation of an integrated resort business “with unique Japanese touch”.

A number of international casino operators has declared interest in vying for a Japan casino resort licence. Up to three IRs will be allowed in a first phase of market liberalisation.

U.S.-based casino firm Las Vegas Sands Corp announced in August it would focus on the Japanese cities of Tokyo and Yokohama in its effort to be allowed to build a casino resort in that country. In a press release, Las Vegas Sands said it would no longer pursue such an opportunity in Osaka.

Macau casino operator Galaxy Entertainment Group Ltd has said it views as positive news the fact other cities were expressing interest in hosting a casino resort. The group’s deputy chairman, Francis Lui Yiu Tung, said: “We are encouraged to see that in recent weeks more cities are considering entering the race for an integrated resort.”

EBITDA improvement

In Friday’s filing, Melco International reported net revenues of HKD22.35 billion (US$2.85 billion) for the first six months of 2019, up 12.9 percent from the prior-year period. The results were boosted by a 12.7-percent increase in casino revenue for the period, to nearly HKD19.49 billion.

Melco International operates its gaming business through subsidiaries – namely Melco Resorts and Entertainment Ltd – in Macau, the Philippines and the Republic of Cyprus. As of June 30, Melco International held approximately 54.05 percent of Melco Resorts.

Melco International said its profit attributable to shareholders for the first half 2019 rose by 34.1 percent year-on-year, to approximately HKD462.1 million. Adjusted earnings before interest, taxation, depreciation and amortisation grew by 15.9 percent, to HKD6.41 billion.

The company’s board declared an interim dividend of HKD0.0611 per share, totalling approximately HKD92.5 million. That compares to an interim dividend of HKD0.0450 per share – or an aggregate HKD69.0 million – in the prior-year period.

Outside of the reporting period, Melco International said it had sold its entire interest in the entity developing the casino business in Cyprus to Melco Resorts.

Melco Resorts is also in the process of acquiring a 19.9-percent stake in Australian casino firm Crown Resorts Ltd. Melco Resorts has already bought a nearly 10-percent stake in Crown Resorts but has deferred the acquisition of a second tranche of shares depending on the outcome of an investigation by Australian authorities.