Operator News

China – Melco climbs eight per cent in Q1

By Phil - 9 May 2022

Melco Resorts & Entertainment generated revenues for the first quarter of 2022 of US$474.9m, representing a decrease of approximately eight per cent from US$518.9m for the comparable period in 2021.

The decrease in total operating revenues 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.

Operating loss for the first quarter of 2022 was US$135.9m, compared with operating loss of US$162.8m in the first quarter of 2021.

Melco generated Adjusted Property EBITDA of US$56m in the first quarter of 2022, compared with Adjusted Property EBITDA of US$30.1m in the first quarter of 2021.

Net loss attributable to Melco Resorts & Entertainment Limited for the first quarter of 2022 was US$183.3m, or US$0.39 per ADS, compared with net loss attributable to Melco Resorts & Entertainment Limited of US$232.9m, or US$0.49 per ADS, in the first quarter of 2021. The net loss attributable to non-controlling interests was US$38.6m and US$44.6m during the first quarters of 2022 and 2021, respectively, all of which were related to Studio City, City of Dreams Manila, and the Cyprus Operations.

Mr. Lawrence Ho, our Chairman and Chief Executive Officer, commented: “Our results for the first quarter of 2022 continue to reflect the impact of the COVID pandemic. We saw a solid performance in Macau through the Chinese New Year holiday period, but COVID-related restrictions and tighter border controls led to Macau GGR falling more than 50% from February to March 2022, and negatively impacted our operating and financial performance for the remainder of the first quarter. Disciplined liquidity management remains a key area of focus. Total debt increased by US$1.3 billion year-on-year as we increased available liquidity to support our operations and ongoing development projects. We will be prudent in managing our balance sheet and liquidity profile as we manage the business through this challenging environment.

“We are pleased to see some easing of travel restrictions with the validity period for negative COVID tests increasing to 72 hours. We remain, as ever, confident in the pent-up demand for Macau as an international tourism destination and believe in a strong recovery once travel restrictions are further relaxed.

“In the Philippines, COVID-related restrictions have been relaxed under alert level 1, and we are starting to see international travel return with meaningful volume growth in our mass segment.

“We remain committed to our development plans in Macau and Cyprus. Construction of Studio City Phase 2 is progressing, and we continue our efforts to complete construction by the deadline set in the land concession of December 27, 2022. This project will complement Melco’s existing offering of ‘next-generation’ world-class entertainment and further enhance the Studio City brand. In Cyprus, construction of City of Dreams Mediterranean continues with a target to open by year-end. However, we are encountering difficulties with our contractor who has struggled with meeting its labor resourcing plans and maintaining progress, which has led to delays. We are actively dealing with these difficulties as we remain fully committed towards delivering Europe’s first integrated resort in Cyprus.

“Turning back to Macau, we look forward to the finalization of the new gaming law by the Macau Government and fully support the Macau Government’s initiatives in relation to the new legislation. We appreciate the Macau Government’s efforts to maintain a streamlined and transparent process. We are committed to participating in the public tender for the award of a new gaming concession and are dedicated to the continued development and diversification of Macau’s economy.

“Lastly, we remain steadfast in our efforts in environmental sustainability with a focus on energy and waste reduction. Melco’s 2021 Sustainability Report will be released in May this year, with new ambitious environmental Group targets included to align with our overarching 2030 goals. As our Scope 3 emissions comprise a significant portion of our impact, we have been actively working to gain a deeper understanding of these emissions and continue to refine our calculation methodology. This year, we will be disclosing Scope 3 Downstream-leased Assets and Fuel and Energy-related Activity (FERA). Moving forward, we are also focusing on aligning with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).”

For the quarter ended March 31, 2022, total operating revenues at City of Dreams were US$256.7m, compared to US$302.5m in the first quarter of 2021. City of Dreams generated Adjusted EBITDA of US$44.4m in the first quarter of 2022, compared with Adjusted EBITDA of US$40m in the first quarter of 2021.

Rolling chip volume was US$2.45bn for the first quarter of 2022 versus US$4.13bn in the first quarter of 2021. The rolling chip win rate was 3.93 per cent in the first quarter of 2022 versus 2.36 per cent in the first quarter of 2021. The expected rolling chip win rate range is 2.85 per cent to 3.15 per cent.

Mass market table games drop decreased to US$552.5m in the first quarter of 2022, compared with US$730.9m in the first quarter of 2021. The mass market table games hold percentage was 30.6 per cent in the first quarter of 2022, compared to 31.7 per cent in the first quarter of 2021.

Gaming machine handle for the first quarter of 2022 was US$380.1m, compared with US$510.2m in the first quarter of 2021. The gaming machine win rate was 3.4 per cent in the first quarter of 2022 versus 3.3 per cent in the first quarter of 2021.

Total non-gaming revenue at City of Dreams in the first quarter of 2022 was US$37.8m, compared with US$47.1m in the first quarter of 2021.

For the quarter ended March 31, 2022, total operating revenues at Altira Macau were US$13.9m, compared to US$14.3m in the first quarter of 2021. Altira Macau generated negative Adjusted EBITDA of US$9.4m in the first quarter of 2022, compared with negative Adjusted EBITDA of US$29.6m in the first quarter of 2021. The year-over-year improvement in Adjusted EBITDA was primarily a result of the repositioning of the property toward the premium mass segment and the shutdown of VIP rolling chip operations since the third quarter of 2021, as well as a reversal of bad debt provisions in the first quarter of 2022.

In the first quarter of 2021, rolling chip volume was US$1.10bn and the rolling chip win rate was 1.6 per cent. The expected rolling chip win rate range is 2.85 per cent to 3.15 per cent.

In the mass market table games segment, drop was US$44.4m in the first quarter of 2022 versus US$51.4m in the first quarter of 2021. The mass market table games hold percentage was 26.3 per cent in the first quarter of 2022, compared with 19.1 per cent in the first quarter of 2021.
    
Gaming machine handle for the first quarter of 2022 was US$50.5m, compared with US$60.2m in the first quarter of 2021. The gaming machine win rate was 4.1 per cent in the first quarter of 2022 versus 3.9 per cent in the first quarter of 2021.

Total non-gaming revenue at Altira Macau in the first quarter of 2022 was US$2.4m, compared with US$3.1m in the first quarter of 2021.

Total operating revenues from Mocha Clubs were US$21.2m in the first quarter of 2022, compared to US$17.8m in the first quarter of 2021. Mocha Clubs generated Adjusted EBITDA of US$4.4m in the first quarter of 2022, compared with Adjusted EBITDA of US$1.8m in the first quarter of 2021.

Gaming machine handle for the first quarter of 2022 was US$478.1m, compared with US$415.2m in the first quarter of 2021. The gaming machine win rate was 4.4 per cent in the first quarter of 2022 versus 4.3 per cent in the first quarter of 2021.

For the quarter ended March 31, 2022, total operating revenues at Studio City were US$71.1m, compared to US$97.9m in the first quarter of 2021. Studio City generated negative Adjusted EBITDA of US$17.3m in the first quarter of 2022, compared with negative Adjusted EBITDA of US$5.2m in the first quarter of 2021. The year-over-year decline in Adjusted EBITDA was primarily a result of softer performance in the mass market table games segment and non-gaming operations.

Studio City’s rolling chip volume was US$439.3m in the first quarter of 2022 versus US$505m in the first quarter of 2021. The rolling chip win rate was 1.66 per cent in the first quarter of 2022 versus 0.29 per cent in the first quarter of 2021. The expected rolling chip win rate range is 2.85 per cent to 3.15 per cent.

Mass market table games drop decreased to US$191.8m in the first quarter of 2022, compared with US$309.3m in the first quarter of 2021. The mass market table games hold percentage was 31.6 per cent in the first quarter of 2022, compared to 29.1 per cent in the first quarter of 2021.

Gaming machine handle for the first quarter of 2022 was US$233m, compared with US$278.3m in the first quarter of 2021. The gaming machine win rate was 3.1 per cent in the first quarter of 2022, compared to 2.5 per cent in the first quarter of 2021.

Total non-gaming revenue at Studio City in the first quarter of 2022 was US$13.3m, compared with US$19.4m in the first quarter of 2021.

For the quarter ended March 31, 2022, total operating revenues at City of Dreams Manila were US$86.9m, compared to US$79.5m in the first quarter of 2021. City of Dreams Manila generated Adjusted EBITDA of US$33m in the first quarter of 2022, compared with Adjusted EBITDA of US$29.4m in the comparable period of 2021.

City of Dreams Manila’s rolling chip volume was US$647.9m in the first quarter of 2022 versus US$272.3m in the first quarter of 2021. The rolling chip win rate was 1.09 per cent in the first quarter of 2022 versus seven per cent in the first quarter of 2021.

Mass market table games drop increased to US$127.3m in the first quarter of 2022, compared with US$100m in the first quarter of 2021. The mass market table games hold percentage was 29.8 per cent in the first quarter of 2022, compared to 34 per cent in the first quarter of 2021.

Gaming machine handle for the first quarter of 2022 was US$776.7m, compared with US$568.9m in the first quarter of 2021. The gaming machine win rate was six per cent in the first quarter of 2022 versus 5.7 per cent in the first quarter of 2021.

The company is licensed to operate a temporary casino, the first casino in the Republic of Cyprus, and four satellite casinos. Upon the completion and opening of City of Dreams Mediterranean, the Company will continue to operate the satellite casinos while operation of the temporary casino will cease.

Our casinos remained open during the quarter ended March 31, 2022, with total operating revenues at Cyprus Casinos of US$16.1m, compared to insignificant operating revenues in the first quarter of 2021. Cyprus Casinos generated Adjusted EBITDA of US$0.9m in the first quarter of 2022, compared with negative Adjusted EBITDA of US$6.4m in the first quarter of 2021. The year-over-year increase in Adjusted EBITDA was primarily a result of the relaxation in COVID-19 related restrictions while casinos were closed during the entire first quarter of 2021 due to government mandated restrictions.

Rolling chip volume was US$2.2m and the rolling chip win rate was negative 3.4 per cent in the first quarter of 2022.

Mass market table games drop was US$26.8m and the mass market table games hold percentage was 16.5 per cent in the first quarter of 2022. Gaming machine handle was US$247.1m and the gaming machine win rate was 4.9 per cent in the first quarter of 2022.