Melco's revenues sees 9% quarterly growth amid Macau's industry recovery

Gaming operator Melco Resorts & Entertainment posted a report of its second quarter results. Its net losses were contracted to $185.7 million in this period of 2021, as net revenues increased by about 9% from the previous quarter to almost $566 million. 

Casino operations made up the vast majority of this past quarter’s revenue, at $478.6 million, up 224.2% year-on-year. Rooms brought in $39 million, up 451.4%, while food and beverage revenue increased by 345.1% to $25.4 million and entertainment, retail and other revenue was up 47.7% to $22.3 million.

During this period of 2021, the group also reported $79.1 million in adjusted EBITDA (earnings before interests, taxes, depreciation and amortization), a 163% quarter to quarter rise from the $30.1 million registered in the previous three months and an Adjusted EBITDA loss of $156.3 million. 

When it comes to revenue by venue, Melco’s City of Dreams Macau resort brought in $347.6 million, a 129.8% increase from the second quarter of 2020. Of this total, $52.2 million came from non-gaming operations, more than four times the previous year’s total, meaning the remaining $295.4 million came from gaming.

For the quarter ended June 30, 2021, total operating revenues at Altira Macau were $18.3 million, compared to $17.0 million in the second quarter of 2020. Altira Macau generated negative Adjusted EBITDA of $17.3 million in the second quarter of 2021, compared with negative Adjusted EBITDA of $19.4 million in the second quarter of 2020.

Total operating revenues from Mocha Clubs were $24.1 million in the second quarter of 2021, compared to $23.2 million in the second quarter of 2020. Mocha Clubs generated Adjusted EBITDA of $5.6 million in the second quarter of 2021, compared with Adjusted EBITDA of $4.4 million in the same period in 2020.

For the quarter ended June 30, 2021, total operating revenues at Studio City were $104.5 million, compared to $10.9 million in the second quarter of 2020. Studio City generated negative Adjusted EBITDA of $1.2 million in the second quarter of 2021, compared with negative Adjusted EBITDA of $42.3 million in the second quarter of 2020. The year-over-year change in Adjusted EBITDA was primarily a result of better performance in all gaming segments and non-gaming operations.

Operating loss for the second quarter of 2021 was $128.1 million, compared with operating loss of $370.8 million in the second quarter of 2020.

According to Sanford C. Bernstein analysts, EBITDA was negatively impacted by an employee compensation-related charge for the “thinking of you” program for staff that allows for leave to be taken with reduced compensation.

The net loss attributable to Melco Resorts & Entertainment for the second quarter of 2021 was $185.7 million, or $0.39 per ADS, compared with net loss attributable to the company of $368.1 million or $0.77 per ADS in the second quarter of 2020.

Melco held some $1.81 billion in cash and bank balances as of 30 June 2021, including $298.7 million of bank deposits with original maturities over three months and $0.4 million of restricted cash.

Total debt, net of unamortized deferred financing costs and original issue premiums, was $6.16 billion at the end of the second quarter of 2021.

The group also reported almost $153.0 million in capital expenditures for the second quarter of 2021, primarily related to various construction projects at City of Dreams, Studio City Phase 2 and City of Dreams Mediterranean.

After the report was released, Chairman and CEO Lawrence Ho spoke about the company’s numbers for the second quarter of the year. 

“We are pleased to see a progressive recovery in business levels during the second quarter of 2021 in our integrated resorts, despite the challenges that we have faced as a result of the COVID-19 pandemic and related travel restrictions. Mass and premium mass market players have proven to be the primary drivers of the recovery this quarter, and are expected to be going forward as we continue to dedicate our resources toward these segments of the market”.

He also added that “we remain optimistic on our Macau market outlook, especially as Macau explores scenarios for more flexible travel with other cities in the Greater Bay Area”.