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Melco Resorts & Entertainment Limited is a developer, operator, and owner of integrated resorts in Asia and Europe. It has reported its unaudited results for the second half of 2023.
The total operating revenue for the second quarter in 2023 was US$947.9 Million, an increase of about 220% over the US$296.1 Million for the same period in 2022. The growth in total operating revenue was due primarily to improved performance across all gaming segments, and non-gaming activities, primarily as a result of the relaxation of COVID-19 restrictions in Macau, in January 2023. Also, Studio City Phase 2, Epic Tower, and the indoor waterpark opened in April 2023.
Operating income in the second half of 2023 reached US$64.3m, compared to a loss of US$209.2m in the second half of 2022.
Melco generated an Adjusted Property EBITDA (1) in the second half of 2023 of US$267.3 millions, compared to a negative Adjusted Property EBITDA in the first half of 2022 of US$13.8million.
Melco Resorts & Entertainment Limited’s net loss for the second half of 2023, which was US$23.4m, or US$0.05/ADS, was US$23.4m, or US$0.05/ADS. This compares to US$251.5m, or US$0.53/ADS, during the second half of 2022. Net loss attributable non-controlling interests in the second quarters of both 2023 and 2012 was US$27.7 and US$43.2 respectively. This was all related to Studio City and City of Dreams Manila and City of Dreams Mediterranean & Other.
Lawrence Ho, Chairman and CEO of the company, stated that “the strength of Macau’s recovery is evident from the 43% growth in gross gaming revenues in the second quarter 2023 as compared to the previous quarter 2023.” The mass drop has increased month-to-month, and the turnover in our direct premium VIP segment continues to surpass 2019 during the second quarterly.
“Labor issues in Macau are largely resolved.” Melco has been able provide all of its services and amenities to our customers. With the opening of W Macau Studio City in September, we expect to add 560 more hotel rooms to our existing portfolio. We are therefore well-positioned to accommodate the continued growth of Macau’s customers.
“The mass segment also leads the recovery in the Philippines and continues to outperform in 2019 in the second half of 2023. In Cyprus, City of Dreams Mediterranean opened to the public on July 1st after a soft opening that was successful in June. We are excited about its prospects, as we expand our operations.
Environmental sustainability is embedded into our core business. Examples of this include the sophisticated water filtration system installed in our waterpark at Studio City to reduce water consumption and improve water reuse and meticulously-designed sustainable packaging and amenities that are free of single-use plastics. “We are continuing to work towards achieving BREEAM Certifications for Studio City Phase 2 as well as City of Dreams Mediterranean after the completion of construction.”
City of Dreams Second quarter results
City of Dreams’ total operating revenue for the quarter ending June 30, 2023 was US$506.2m, compared to US$97.3m in the second quarter of 2020. City of Dreams generated an Adjusted EBITDA of US$161.2 in the second half of 2023 compared to a negative Adjusted EBITDA of US$28.5 in the same quarter of 2012. The increase in Adjusted EBITDA over the past year was primarily due to better performance across all gaming segments as well as non-gaming activities.
The rolling chip volume for the second half of 2023 was US$5.76billion, compared to US$748.1mil in the second half of 2022. The winning rate for rolling chips was 2.88% during the second quarter 2023, compared to 2.57% in 2022. The expected range of rolling chip win rates is 2.85%-3.15%.
The mass market table game drop increased from US$209.1 to US$1.24billion in the 2nd quarter of 2023. This is compared to US$209.1m in the 2nd quarter of 2022. In the second quarter 2023, the mass market table game hold percentage was 32.0%, down from 33.0% the previous quarter.
The gaming machine handle in the second half of 2023 reached US$771.5m, up from US$217.1m in the second half of 2022. In the second quarter 2023, the gaming machine win rate was 2,8% compared to 2.7% in 2022.
City of Dreams’ total non-gaming revenues in the 2nd quarter of 2023 were US$68.9m, compared to US$24.3m in the 2nd quarter of 2022.
Altira Macau Second Quarter Results
Altira Macau’s total operating revenue for the quarter ending June 30, 2023 was US$29.3 millions, compared to US$7.2 in the second quarter 2022. Altira Macau achieved Adjusted EBITDA in the second half of 2023 of US$4.3million, as opposed to a negative Adjusted EBITDA in the first half of 2022 of US$11.3million. The increase in Adjusted EBITDA over the past year was primarily due to better performance across all gaming segments as well as non-gaming activities.
The mass market table game segment dropped by US$116.6 millions in the second half of 2023, compared to US$29.3 in the same quarter in 2022. In the second quarter 2023, the mass market table game hold percentage was 24,2% compared to 17.5% in 2022.
The second quarter 2023 saw a gaming machine handle of US$82.0 millions, up from US$41.5 in the second half of 2022. In the second quarter 2023, the gaming machine win rate was only 3.3% compared to 4.2% in 2022.
Altira Macau’s total non-gaming revenues in the second half of 2023 were US$4.9m, compared to US$1.9m in the same quarter in 2022.
Mocha & Other Second Quarter Results
Mocha and Other generated total operating revenues of US$28.8 millions in the second half of 2023 compared to US$17.0 in the same quarter in 2022. Mocha and other generated an Adjusted EBITDA in the second half of 2023 of US$6.7million, compared to US$2.5million in the same quarter in 2022.
The drop in mass market table games was US$41.4 in the second half of 2023, compared to US$0.4 in the same quarter in 2022. The hold percentage for mass market table games was 18.2% in 2023, compared to 26.9% in 2022.
The second quarter 2023 saw a gaming machine handle of US$502.8m, up from US$406/8m in the second half of 2022. In the second quarter 2023, the gaming machine win rate was 4.5 percent compared to 4.2% in 2022.
Studio City Second quarter results
Studio City’s total operating revenue for the quarter ending June 30, 2023 was US$236.0 Million, compared to US$35.9 Million in the second quarter 2022. Studio City’s Adjusted EBITDA was US$41.1 in the second half of 2023 compared to a negative Adjusted EBITDA in the second half of 2022. The increase in Adjusted EBITDA over the past year was mainly due to better performance of mass market table games and non-gaming activities.
Studio City’s rolling chips volume in the 2nd quarter of 2023 was US$789.5 Million compared to US$104.1 Million in the 2nd quarter of 2022. The winning rate for rolling chips was 1.43% during the second quarter 2023, compared to 5.33% during the second quarter 2022. The expected range of rolling chip win rates is 2.85%-3.15%.
The mass market table game drop grew to US$716.6 millions in the second half of 2023 compared to US$93.2 in the same quarter in 2022. In the second quarter 2023, the mass market table game hold percentage was 25,5% compared to 25.7% the previous quarter.
The second quarter 2023 saw a gaming machine handle of US$595.4m, up from US$201.7m in the second half of 2022. In the second quarter 2023, the gaming machine win rate increased from 2.5% to 3.4%.
Studio City’s total non-gaming revenues in the second half of 2023 were US$74.3m, up from US$8.3m in the same quarter in 2022.
City of Dreams Manila Second quarter results
City of Dreams Manila’s total operating revenue for the quarter ending June 30, 2023 was US$116.4 Million, compared to US$111.7 Million in the second quarter of 2020. City of Dreams Manila produced Adjusted EBITDA of US$47.0 in the second quarter of the year 2023. This compares to US$49.0 in the same period of the previous year.
City of Dreams Manila’s rolling chip volumes were US$520.2 in the 2nd quarter of 2023, compared to US$771.3 in the 2nd quarter of 2022. The winning rate for rolling chips was 3.10% during the second quarter 2023, compared to 2.95% during the second quarter 2022. The expected range of rolling chip win rates is 2.85%-3.15%.
The mass market table games decline increased to US$194.5 millions in the second half of 2023 compared to US$178.4 in the second half of 2022. In the second quarter 2023, the mass market table game hold percentage was 31,3%, up from 29.0% the previous quarter.
The second quarter 2023 saw a gaming machine handle of US$1.01bn, up from US$925.6m in the second half of 2022. In the second quarter 2023, the gaming machine win rate was 4,8% compared to 5.3% in 2022.
City of Dreams Manila’s total non-gaming revenues in the 2nd quarter of 2023 were US$28.7m, compared to US$27.3m in the 2nd quarter of 2022.
City of Dreams Mediterranean Results and Other Second-Quarter Results
City of Dreams Mediterranean opened its doors to the public officially on July 10, 2023 after a soft launch in June. The Company operates three satellite casinos on Cyprus alongside City of Dreams Mediterranean.
The total operating revenue at the Cyprus Casinos was US$30.9m for the quarter ending June 30, 2023, compared to US$21.7m in the second quarter 2022. Cyprus Casinos generated an Adjusted EBITDA in the second half of 2023 of US$6,9 million, compared to US$5.6 in the same quarter in 2022. The increase in Adjusted EBITDA over the past year was primarily due to better performance at the mass market segment.
The rolling chip volume in the second quarters 2023 and 2012 was US$0.1million. In the second quarter 2023, the rolling chip win percentage was 2.52%, while it was negative 6.12% for the second quarter 2022. The range of the expected rolling chip rate is 2.85%-3.15%.
The mass market table game drop in 2023 was US$47.0 Million, compared to US$31.4 Million in 2022. In the second quarter 2023, the mass market table game hold percentage was 21,9% compared to 19.5% in 2022.
The gaming machine handle in the second half of 2023 reached US$391.7m, up from US$315.9m in the second half of 2022. In the second quarter 2023, the gaming machine win rate was 5,1% compared to 5.0% in 2022.
City of Dreams Mediterranean & Other’s total non-gaming revenues in the 2nd quarter of 2023 were US$1.9m, compared to US$0.1m in the 2nd quarter of 2022.
Factors that Affect Earnings
The total net non-operating costs for the second quarter 2023 was US$116.5 millions. This included interest expenses in the amount of US$123.5million, minus amounts capitalized, and interest income of US$5.0million.
In the second quarter 2023, depreciation and amortization cost US$136.5 millions. Of this amount, US$5.7million was attributed to amortization expenses for land rights.
