Macau's operator

Melco revenue down 9% in Q4 amid travel restrictions; up 17% to $2B for full-year

Lawrence Ho, Chairman and Chief Executive Officer of Melco.
Reading time 2:38 min

Asian gaming and hospitality heavyweight Melco has shared its unaudited fourth-quarter 2021 and full-year financial results. Total operating revenues for Q4 were $480.6 million, down 9% from $528 million in the comparable period in 2020; while for the full year, the business posted total operating revenues up 17.6% to $2 billion from $1.7 billion the prior year.

“COVID-related travel restrictions continued to impact our fourth quarter operating and financial performance,” commented Lawrence Ho, Chairman and Chief Executive Officer. “We have maintained strong cost discipline under these challenging times and are pleased to see improving EBITDA profitability across each of our geographies this quarter.”

The executive claims the company remains confident customers will return in numbers once restrictions are eased, and further said Melco is pleased to see Macau’s vaccination rate now at over 80%. The operator expects that increasing vaccination rates will facilitate an easing of travel restrictions within the Greater Bay Area.

The decrease in total operating revenues for Q4 was primarily attributable to softer performance in the rolling chip segment, the company claims. This was accompanied by an operating loss for the quarter of $104.4 million. Melco generated Adjusted Property EBITDA of $94 million, compared with $53.4 million in Q4 2020.

Despite the setback faced in the last quarter of the past year, Melco’s CEO said investment commitments remain “unwavering.” In Macau, Cotai Strip hotel casino resort Studio City announced fresh rounds of debt and equity financing in February as the company progresses in its effort to complete the construction of Studio City Phase 2 by a December deadline.

Rendering for Studio City Phase 2

Additionally, in December 2021, the company announced a partnership with Marriott International to run one of its new hotel towers under the W Hotel brand. W Macau at Studio City will have 557 keys, 1,110 square meters of MICE space, renowned lobby lounges, a spa, a fitness center, and an indoor swimming pool.

The business also issued an update on the City of Dreams Mediterranean project in Cyprus, the country’s first integrated casino resort, which is “on track” for completion in H2 of 2022. Melco says it will be “the largest and premier integrated destination resort in Europe,” featuring a five-star hotel with more than 500 luxury rooms and about 10,000 square meters of MICE space.

Melco also discussed the proposed amendment to Macau’s gaming law, which the government put forward to the city’s Legislative Assembly on January 14. The company stated it was “grateful” for the opportunity to contribute its views during the public consultation process and for providing “a clear framework.”

“We are committed to participating in the public tender for the award of a gaming concession and will continue to promote economic diversification in Macau,” said Lawrence Ho. “Our actions to date reflect our confidence in the pent-up demand for leisure and in the long-term growth and stability of Macau.”

Rendering for City of Dreams Mediterranean

Breaking down figures by resort finds City of Dreams Macau posted operating revenue of $244.8 million in Q4, down from $321.2 million the prior year. The Altira Macau hotel posted operating revenues down to $13.3 million in Q4 from $28 million; Studio City maintained identical $88.2 million operating revenues compared to 2020; and City of Dreams Manila posted operating revenues of $83.9 million, up when compared to $63.8 million in Q4 2020.

For the full year, Melco managed to reduce an operating loss of $940.6 million in 2020 to $577.5 million. The business also delivered Adjusted Property EBITDA of $235.1 million, compared with a negative $204.3 million in 2020.

The business expects ongoing Covid-19 outbreaks to continue having a material effect on operations and financial position in the first quarter of the current year, much like they did in the past quarter.