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China – 2017 brings double-digit growth for Melco Resorts

By - 18 February 2018

Melco Resorts reported double-digit gains in revenue and earnings in 2017 with GGR increasing 18 per cent to $5.3bn.

Mass market table drop and revenue enjoyed solid gains at both Studio City and Altira, while City of Dreams reported mass table revenue falling 13% year-on-year, primarily the result of a higher-than-average mass win rate in Q4 2016 falling back to earth in the most recent quarter.

Melco Resorts’ net revenue for the fourth quarter of 2017 was US$1,332.6m, representing an increase of approximately 12 per cent from US$1,192.9m for the comparable period in 2016. The increase in net revenue was primarily attributable to higher rolling chip revenues across all properties and higher mass market table games revenues in Studio City and City of Dreams Manila, partially offset by lower mass market table games revenues in City of Dreams in Macau.

Operating income for the fourth quarter of 2017 was US$129m, compared with operating income of US$116m in the fourth quarter of 2016, representing an increase of 11 per cent. The improvements were felt most at Studio City, where having had to wait until November 2016 to add VIP, skewed any comparison with VIP turnover growing by 326 per cent.

Lawrence Ho, our Chairman and Chief Executive Officer, said “After three consecutive years of decline, Macau’s gaming revenue rebounded strongly in 2017 with approximately 20 per cent growth compared to 2016 on a year-on-year basis. In 2018, we expect another year of robust growth for Macau, as the market benefits from the improving demand environment, the anticipated completion of the Hong Kong-Zhuhai-Macau Bridge, and the ongoing build-out of Cotai.

“Mass and Premium Mass gaming should remain the primary drivers of Macau’s future growth, which is consistent with our long-held vision for the evolution of the market. Our first mover advantage and our strong determination to offer the best integrated resort experience have enabled City of Dreams to remain a leader in Macau’s premium mass gaming market, despite multiple new resorts opening. To further solidify our leadership position in this important market segment, we have executed on an extensive upgrade to our flagship property, City of Dreams, which includes the announced launch of the Forbes 5-star “NÜWA” hotel, the rebranding and redevelopment of The Count:Down, and the eagerly awaited opening of Morpheus, the cornerstone of the final phase of development for City of Dreams, which is set to be a true landmark for all of Macau.

“At Studio City, we are embarking on a series of property upgrades to refine the entertainment offerings and improve accessibility into the resort, which we believe will facilitate the continuing ramp up that Studio City has experienced over the past several quarters. We will also continue to explore the phase 2 expansion of Studio City which we believe will augment the existing room inventory and entertainment offerings and contribute to the continued growth and development of this property.”

In the Philippines, City of Dreams Manila continued to perform in all sectors for the company in the fourth quarter with VIP turnover and revenue up 40 per cent and 20 per cent respectively. Mass market tables increased by over 40 per cent in revenue while slots increased by 11 per cent.

Mr. Ho added: “In The Philippines, City of Dreams Manila delivered another strong quarter with all gaming segments continuing to enjoy robust year-on-year growth, despite new supply within Entertainment City.

“Lastly, Japan continues to be a core focus of ours. With the passage of the Integrated Resorts (IR) implementation bill, the country will take a major step forward toward the development of the next generation of integrated resorts that will operate in this incredibly exciting, yet currently underpenetrated, tourism destination. With our high quality assets, dedication to world-class entertainment offerings, market-leading social safeguards and compliance culture, and commitment to being an ideal partner to local governments and communities alike, we believe Melco is in a strong position to help Japan realise the vision for integrated resort development with unique Japanese touch.”

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