China – Melco reiterates financial commitment to Japanese dreamBy Phil - 6 November 2020
Despite the downturn in the travel sector severely restricting Melco Resorts revenues in the third quarter, Chairman and Chief Executive Officer, Lawrence Ho was keen to emphasise the Macau operator’s continuing commitment to investing in the future Japanese casino sector.
“I want to highlight our unwavering commitment to bring to the country the best IR the world has ever seen,” Mr. Ho explained. “We believe our focus on the Asian premium segment, a portfolio of high-quality assets, devotion to craftsmanship, dedication to world-class entertainment offerings, market-leading social safeguard systems, established track record of successful partnerships, a culture of exceptional guest service, and a continuing commitment to employee development puts Melco in a strong position to help Japan realise the vision of developing a world-leading IR with unique Japanese touch. The process in Japan has been substantially delayed and remains complex. We will continue to be patient as we evaluate the landscape to ensure that Melco pursues the right opportunity that takes advantage of Melco’s core strengths to drive strong value creation.”
Melco Resorts generated round 15 per cent of 2019’s Q3 revenues during the third quarter of 2020 with revenue coming in at US$0.21bn, representing a decrease of approximately 85 per cent from for the comparable period in 2019.
The decrease in total operating revenues was primarily attributable to softer performance in all gaming segments and non-gaming operations as a result of the COVID-19 pandemic, which resulted in a significant decline in inbound tourism in the third quarter of 2020.
Operating loss for the third quarter of 2020 was US$275m, compared with operating income of US$175.2m in the third quarter of 2019.
Mr. Ho said: “COVID-19 and the subsequent travel restrictions continue to have a significant negative impact on our operating and financial performance. Despite that, our integrated resorts experienced a moderate recovery in business levels during the third quarter, benefiting from the partial resumption of casino operations in Cyprus and Manila, as well as the gradual resumption of visa issuances by the Mainland Chinese authorities under the Individual Visit Scheme (IVS).
“While we are encouraged by the recent positive developments, ensuring the safety and well-being of our colleagues, customers and communities in which we operate remains our highest priority. Melco also fully supports the Macau SAR government’s newly launched scheme for tourists from Mainland China with the aim to expand the number of visitors, boost the economy and protect local jobs. In support of the scheme, Melco strives to continue prioritizing epidemic prevention measures by working hand-in-hand with local small and medium enterprise (SME) partners, while contributing collaboratively to the city’s sustainable development and economic recovery.
“Melco remains committed to its global development program. Construction on the expansion of Studio City is progressing. Upon completion, Studio City will offer approximately 900 additional luxury hotel rooms and suites, one of the world’s largest indoor/outdoor water parks, a Cineplex, fine-dining restaurants and state-of-the-art MICE space. In Europe, we are developing City of Dreams Mediterranean which, upon completion, will be Europe’s largest integrated resort with approximately 500 luxury hotel rooms, a 1,500-seat amphitheater, and approximately 10,000 square meters of MICE space.
In Macau, revenues at City of Dreams were US$91.4m, compared to US$787.3m in the third quarter of 2019. Studio City’s revenues were down to US$30.8mcompared to US$337.7, Altira Macau was down to US$11m, compared to US$113.9m, whilst revenues from Mocha Clubs were US$11.3m in the third quarter of 2020, compared to US$29.5m in the third quarter of 2019.
In the Philippines, City of Dreams Manila’s revenues were US$43.4m, compared to US$130.5m in the third quarter of 2019.
Cyprus Casinos generated US$20.5m, compared to US$26.7m in the third quarter of 2019.