Melco Oct EBITDA slightly positive despite bad debt: CFO
Casino operator Melco Resorts and Entertainment Ltd was “marginally in positive EBITDA territory” during October, said Geoff Davis, the firm’s chief financial officer (CFO), during the group’s conference call on Thursday to discuss third-quarter earnings.
He was referring to earnings before interest, taxation, depreciation and amortisation.
The assessment took account of “roughly US$10 million of bad debt expense” during October, added the CFO.
Management said during the call that mid- to high-20s of percent of pre-Covid-19 gross gaming revenue would get the company to EBITDA break-even.
David Sisk, the company’s chief operating officer – Macau resorts, mentioned on the call that Macau operations were currently “at about 35 percent” of “volumes” seen before the pandemic.
Most of the volume was from “mass and particularly premium mass” play, said the executive. He added that junket business and house-managed VIP business had been “somewhat challenged by the visa process,” a reference to mainland China players being able to get to Macau, and by travel restrictions for movement between Hong Kong and Macau.
Currently anyone seeking to come to Macau via Hong Kong, must undergo a Covid-19 test and spend 14 days in quarantine on arrival.
Giving a general picture of the firm’s Macau casino business currently, Mr Sisk added that players’ “average bets are a bit lower” than pre-crisis levels.
He added players seemed to be “a bit more cautious,” though he noted “playing time has not changed that much”.
The executive further noted: “Players don’t move between the properties as much now.
“I think that’s probably more of a reaction to Covid-19; and just the difficulty as you go through each of the properties and having to go through a kind of a check as you’re going from property to property or in and out of the casinos,” Mr Sisk added.
The Macau resorts’ COO noted that visa issuance for mainland China residents to come to Macau was “inconsistent” in terms of speed of turnaround.
Outside Guangdong province, “it can take a day” to issue a visa. In Guangdong – the province next door to Macau – “sometimes it can take 14 days,” stated the executive.
“A lot of our Guangdong players that came in early October have been told basically they can’t come back for two months,” stated Mr Sisk.
Elsewhere on the call, his boss Lawrence Ho Yau Lung, chairman and chief executive of Melco Resorts, said the revamped Nuwa hotel at City of Dreams in Macau would open before the Lunar New Year, which will fall on February 12.
He stated: “We have made good use of the past few months to accelerate various upgrade projects at City of Dreams, with the fully-renovated Nuwa hotel tower currently anticipated to reopen before the Chinese New Year.”
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