GGRAsia – Melco Resorts 1Q EBITDA of US$56mln, narrows loss

Melco Resorts 1Q EBITDA of US$56mln, narrows loss

May 06, 2022 Newsdesk Latest News, Macau, Philippines, Top of the deck

Global casino operator Melco Resorts and Entertainment Ltd reported on Thursday a net loss attributable to its shareholders of US$183.3 million for the first quarter of 2022, compared with a net loss of US$232.9 million in the prior-year period.

Melco Resorts runs casinos in Macau, a property in the Philippine capital Manila, and gaming venues on the Mediterranean island of Cyprus.

The group’s quarterly operating revenues were US$474.9 million, down 8.5 percent year-on-year, and a decline of 1.2 percent sequentially. The decrease “was primarily attributable to heightened border restrictions in Macau related to Covid-19 which led to softer performance in the mass-market table games segment,” said the group in a filing in the United States.

Despite the decline in revenues, Melco Resorts generated adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$56.0 million in the first quarter of 2022, compared with adjusted property EBITDA of US$30.1 million a year ago. Judged quarter-on-quarter, adjusted property EBITDA fell by 40.4 percent.

Lawrence Ho Yau Lung, Melco Resorts’ chairman and chief executive, said on the quarterly earnings call, that the firm’s results for the first quarter of 2022 “continued to reflect the impact of the Covid pandemic.”

“We saw a relatively solid performance across all of our segments in Macau through the Chinese New Year holiday period [in early February], but an increase of Covid cases in mainland China and tighter border controls led to Macau gross gaming revenue falling more than 50 percent from February to March 2022,” stated the CEO.

Such situation “negatively impacted” the group’s “operating and financial performance for the remainder of the first quarter,” he added.

Cod Manila recovery

At City of Dreams Manila (pictured), first-quarter operating revenues were US$86.9 million, up 9.3 percent year-on-year, and 3.6 percent sequentially. The venue generated adjusted EBITDA of US$33.0 million in the first quarter of 2022, compared with US$29.4 million in the comparable period of 2021.

City of Dreams Manila’s rolling chip volume was US$647.9 million in the first quarter of 2022 versus US$272.3 million a year earlier. Mass-market table games drop increased to US$127.3 million in the three months to March 31, compared with US$100.0 million in the first quarter of 2021.

Mr Ho said on the conference call: “In the Philippines, we have been operating our casino at 100-percent capacity since March 1, when Covid-related restrictions were reduced to alert level 1. We are starting to see international travel return, and in April we saw daily volumes reach close to 80 percent of pre-Covid levels.”

Brokerage Sanford C. Bernstein Ltd said in a Thursday note that City of Dreams Manila “recorded its strongest quarterly gross gaming revenues (GGR) post-Covid in first-quarter 2022,” with mass-market tables GGR reaching “78 percent of first-quarter 2019.”

“The strength in mass was better than expected (even though January and February were still impacted by social distancing constraints). Mass revenues could get back to pre-pandemic levels over the next few quarters,” said analysts Vitaly Umansky and Louis Li.

In Cyprus, the group’s gaming venues remained open during the first quarter, subject to certain health and safety measures.

Operating revenues at Cyprus Casinos stood at US$16.1 million in the three months to March 31, “compared to insignificant operating revenues in the first quarter of 2021.” Cyprus Casinos generated adjusted EBITDA of US$0.9 million in the first quarter of 2022, compared with negative adjusted EBITDA of US$6.4 million in the prior-year period.

The Melco Resorts group’s total cash and bank balances as of March 31 aggregated to US$1.90billion, including US$0.4 million of restricted cash. Total debt, net of unamortised deferred financing costs and original issue premiums, was US$7.07 billion at the end of the first quarter.