GGRAsia – Melco Resorts 4Q loss narrows, full-year loss US$812 million

Melco Resorts 4Q loss narrows, full-year loss US$812 million

Mar 02, 2022 Newsdesk Latest News, Macau, Philippines, Top of the deck

Global casino operator Melco Resorts and Entertainment Ltd reported on Tuesday a net loss attributable to its shareholders of US$159.9 million for the fourth quarter of 2021, compared with a net loss of US$199.7 million in the fourth quarter of 2020.

The full-year net loss narrowed year-on-year, to US$811.8 million, from US$1.26 billion in 2020.

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$480.6 million, down nearly 9.0 percent year-on-year. The decrease was “primarily attributable to softer performance in the rolling chip segment,” said the group in a filing in the United States, a reference to the VIP segment.

Lawrence Ho Yau Lung, Melco Resorts’ chairman and chief executive, referred on the quarterly earnings call to the “entire” VIP and junket market in Macau having “imploded”. That was understood to be a reference to an almost complete suspension – starting in the fourth quarter – of collaboration between casinos and junket organisations serving mostly Chinese players, in the Macau market and beyond.

Nonetheless, Melco Resorts’ operating loss for the three months to December 31 narrowed to US$104.4 million, from US$144.8 million a year earlier. Quarterly adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 76.0 percent year-on-year, to US$94.0 million.

In prepared remarks, Mr Ho said Covid-19 related travel restrictions “continued to impact… operating and financial performance” in the fourth quarter.

But he added: “We are confident that our customers will return in numbers once restrictions are eased.”

Though on the call he said he didn’t expect either online-processed individual visas or group-tour visas for Chinese mainland consumers to visit Macau, would restart before travel restrictions between mainland China and Hong Kong were eased, and by extension the constraints covering Macau-Hong Kong travel.

At City of Dreams (pictured), the group’s Cotai flagship resort in Macau, fourth-quarter operating revenues were down 23.8 percent year-on-year, at US$244.8 million.

The venue’s adjusted EBITDA declined 13.3 percent, to US$49.7 million. It was primarily a result of “softer performance in the rolling chip and mass market table games segments, partially offset by reversal of bonus and bad debt provisions,” said the company.

City of Dreams Macau’s rolling chip volume was down 1.3 percent year-on-year, at US$3.12 billion. Quarterly mass-market table games drop at the venue was US$690.9 million, down 6.6 percent year-on-year.

The property’s gaming machine handle for the quarter was US$421.6 million, a decline of 10.1 percent from the same period in 2020.

The group’s majority-owned Cotai resort Studio City saw total quarterly operating revenues flat, at US$88.2 million.

The venue’s quarterly adjusted EBITDA crept into positive territory, at US$100,000, compared with negative adjusted EBITDA of US$5.5 million in the final quarter of 2020.

Philippines, Cyprus

At City of Dreams Manila, operated by the group, fourth-quarter operating revenues were US$83.9 million, up 31.5 percent year-on-year. Adjusted EBITDA went up 106.0 percent, to US$34.6 million. The gain was mostly due to improved performance in the mass market table games and gaming machine segments, “partially offset by softer performance in the rolling chip segment,” said the firm.

City of Dreams Manila’s rolling chip volume shrank 15.0 percent, to US$206.3 million in the fourth quarter. Mass-market table games drop went up 13.7 percent, to US$113.2 million. Gaming machine handle for the fourth quarter of 2021 was US$815.1 million, a rise of 53.2 percent year-on-year.

In Cyprus, the group’s City of Dreams Mediterranean resort was on track for “completion” in the second half of 2022, the group said in its results. At the time of the third-quarter results, in November last year, the group had said the property was on track to “open” in the second half of 2022.

For now in that market, the group is licensed to operate a temporary casino, the first casino in the Republic of Cyprus, and four satellite casinos. The latter quartet will continue after the flagship opens.

The Cyprus venues remained open during the quarter ending December 31, 2021. Total operating revenues rose 173.2 percent, to US$22.4 million. Adjusted EBITDA increased 333.3 percent, to US$5.2 million. The Cyprus outlets had been temporarily suspended at the end of the fourth quarter of 2020.

The Melco Resorts group’s total cash and bank balances as of December 31 aggregated to US$1.65 billion, including US$0.4 million of restricted cash. Total debt, net of unamortised deferred financing costs and original issue premiums, was US$6.56 billion at the end of the fourth quarter.