Melco Resorts eyes resuming dividend payment in 2H2025

Nov 06, 2024 Newsdesk Latest News, Macau, Rest of Asia, Top of the deck  

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Casino group Melco Resorts & Entertainment Ltd aims to resume dividend payment to shareholders in the second half of 2025, said on Tuesday the firm’s management on the call to discuss its third-quarter earnings.

“We would like to return to being a dividend-paying company,” stated Geoff Davis, Melco Resorts’ executive vice president and chief financial officer. “We think it’s potentially possible in the second half of next year.”

The firm last paid a dividend in February 2020.

Melco Resorts’ management stressed that, however, debt reduction and de-levering were its priorities in terms of allocation of capital,

In that regard, Mr Davis stated that Melco Resorts had not set any net debt to earnings trigger for dividend resumption. The decision on restarting payment of dividends to shareholders was “more of a holistic decision-making process”, he said.

Melco Resorts operates casinos in Macau, as well as in the Philippine capital Manila, and in Cyprus. The firm is involved in the development of a US$1-billion casino complex in Sri Lanka’s capital Colombo.

As part of a process of returning value to shareholders, Melco Resorts would remain “opportunistic” regarding share repurchases, based on potential identification by management of “dislocated share price” situations. But Mr Davis said it was was “unlikely” for Melco Resorts to institute a formal share buy-back programme.

In August, Melco Resorts announced the buying-back of just under 8.34 million shares of its own stock on the open market, for an aggregate consideration – before expenses – of about US$44.5 million.

Lawrence Ho Yau Lung, Melco Resorts chairman and chief executive, said during Tuesday’s conference call that the firm’s revamped loyalty programme – launched in September and including a new tier for top premium mass players – was “starting to show the benefits of increasing efficiency” in player reinvestment.

Mr Ho also made reference to a number of recent developments at the firm’s Macau properties, including the opening of a signature premium slot area at City of Dreams at the launch of a themed slot area at Studio City in partnership with gaming technology supplier Aristocrat Gaming.

“We also installed new large scale interactive LED screens at Studio City to activate the area at the main entrance in front of the casino,” he added.

“The hard work that we put in over the last couple of quarters, since some of the management reshuffle, is starting – at the very beginning – to pay off,” said Melco Resorts’ CEO, stating the goal of returning the firm to the top 3 Macau operators in terms of gross gaming revenue share.

He highlighted that the group had enjoyed a “very strong” October performance in its Macau operations, wit a “great” October Golden Week performance.

“Our mass drop was up more than 20 percent year over year. More significantly, we had a number of record mass drop days at both City of Dreams and Studio City during that period.”

Improved access

Looking ahead, Mr Ho said Melco Resorts was “enhancing accessibility into City of Dreams” in Cotai. The firm also planned to relaunch its “The House of Dancing Water” resident show in the second quarter of next year, he added.

During the the second quarter conference call, Mr Ho had mentioned the first quarter for the intended relaunch of the show.

“The House of Dancing Water”, a previously long-running stage production at City of Dreams, had been a pre-pandemic favourite with Chinese visitors.

A revamp of Studio City’s high limit gaming area is also planned for 2025, according to Melco Resorts’ management.

Also on the casino operations side of business in Macau, the installation of so-called ‘smart’ tables – using radio frequency identification (RFID) technology – has been “progressing well,” said Mr Ho.

“We have now converted all of the baccarat tables at Studio City to RFID tables. Installation has gone relatively smoothly, and we are just scratching the surface in terms of utilising the data,” he said.

“We expect to complete the installation of RFID tables at City of Dreams within the first quarter of 2025.”

The Macau authorities have been encouraging use of smart tables as a way for the city’s industry to manage more effectively casino operations.

Although most of third-quarter conference call with analysts focused on the Macau operations, Mr Ho also made reference to Melco Resorts’ project in Sri Lanka.

“City of Dreams Sri Lanka opened in October with the 687-keys Cinnamon Life hotel, run by our partner John Keells [Holdings Plc],” he said. “The casino and the new hotel are on track to open in the second half of 2025.”

Overall, Melco Resorts expects total capital expenditure for the final quarter of this year to be approximately US115 million.

“We’ve pushed some of the capital expenditure from 2024 into 2025. So ,in 2025… we’re targeting somewhere in the range of US$400 million… Of that, about 70 percent for 75 percent will be for Sri Lanka,” said Mr Davis.

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