GGRAsia – Melco Resorts back to profit in 1Q as revenue grows

Melco Resorts back to profit in 1Q as revenue grows

Apr 30, 2024 Newsdesk Latest News, Macau, Philippines, Top of the deck

Casino group Melco Resorts & Entertainment Ltd reported total operating revenues of US$1.11 billion for the first quarter of 2024, up 55.2 percent from a year earlier. Judged in quarter-on-quarter terms, the figure rose 1.8 percent, according to a Tuesday press release.

The casino firm said the increase in total operating revenues in the quarter to December “was primarily attributable to the improved performance in all gaming segments and non-gaming operations, largely driven by the continued recovery in inbound tourism to Macau” in the first three months of 2024.

The company posted a first-quarter net profit attributable to shareholders of US$15.2 million, compared to a net loss of US$81.3 million in the opening quarter of 2023. Melco Resorts had a net loss of US$156.6 million in the fourth quarter of 2023.

In the three months to March 31, Melco Resorts’ operating income was US$125.4 million, compared with US$0.4 million in the first quarter of 2023. The figure was up 32.8 percent sequentially.

Total first-quarter operating costs were just under US$987.1 million, down 16.8-percent sequentially. The figure was up 37.8 percent from the prior-year period.

First-quarter adjusted property earnings before interest, taxation, depreciation, and amortisation (EBITDA) were US$298.8 million, down 1.5 percent sequentially, but up 56.6 percent year-on-year.

Melco Resorts runs casinos in Macau, a property in the Philippine capital Manila, and gaming venues on the Mediterranean island of Cyprus. The company announced on Tuesday an investment in a casino resort in Colombo, the Sri Lankan capital. Gaming operations there are expected to “commence in mid-2025,” it said.

Lawrence Ho Yau Lung, Melco Resorts’ chairman and chief executive, said in prepared remarks: “We have had an eventful year so far. We have had a shift in management, our sales force has been restructured, we knocked down walls and started reconfiguring our gaming areas and opened several new retail outlets at Studio City.”

He added: “On the financing side, we repaid another US$250 million in debt, raised US$750 million in bonds, and extended the maturity of our US$1.9 billion revolving credit facility, significantly reducing our refinancing risk in 2025.”

Improved business

The CEO said the “improving results” observed in March and April reflected the company’s new “marketing initiatives” and the “new business” it had generated “since the management changes in late February”.

Mr Ho also said City of Dreams Manila “continued to show solid results in the mass segment, but was impacted by luck factors in VIP” during the first quarter of 2024.

“City of Dreams Mediterranean and our satellite casinos in Cyprus exhibited positive cash flow through the first quarter despite continued conflicts in the region and we are cautiously optimistic that we can expand our business into the seasonally strong summer months,” he added.

At the group’s Macau flagship property, City of Dreams (pictured), total operating revenue in the first quarter of 2024 was US$550.9 million, down from US$559.8 million in the preceding three months. It compared with US$358.3 million in the first quarter of 2023.

The property’s adjusted EBITDA rose 61.9 percent year-on-year, to US$153.6 million. The figure was down 7.6 percent sequentially.

The group’s majority-owned Cotai resort Studio City saw first-quarter operating revenues of US$331.4 million, and generated adjusted EBITDA of US$87.9 million, compared with US$20.6 million a year earlier and US$77.3 million in the final quarter of 2023.

At City of Dreams Manila, total operating revenues fell 8.1 percent quarter-on-quarter, to US$110.7 million, and were down 17.0 percent from a year ago.

The complex generated adjusted EBITDA of US$37.8 million in the first three months of 2024, down from US$48.8 million in the preceding quarter, and 37.9-percent lower compared to a year ealier.