he report issued by Melco Resorts & Entertainment shows that net revenue for the second quarter of 2018 was US$1,228.6 million, representing a decrease of approximately 5% from US$1,298.2 million reported for the comparable period in 2017. The decrease in net revenue was primarily attributable to higher commissions reported as a reduction in revenue upon the company’s adoption of a new revenue recognition standard issued by the Financial Accounting Standards Board, partially offset by higher group-wide gross gaming revenues. The company adopted the New Revenue Standard using the modified retrospective method from January 1, 2018.
Results for the periods beginning on or after January 1, 2018 are presented under the New Revenue Standard, while prior year amounts are not adjusted and continue to be reported in accordance with the previous basis. Under the previous basis, before the adoption of the New Revenue Standard, net revenue for the second quarter of 2018 would have been US$1,337.4 million, which would have represented an increase of approximately 3% from the US$1,298.2 million for the comparable period in 2017.
Operating income for the second quarter of 2018 was US$118.1 million, compared with operating income of US$127.4 million in the second quarter of 2017, representing a decrease of 7%.
Adjusted property EBITDA was US$355.5 million for the second quarter of 2018, as compared to Adjusted property EBITDA of US$329.5 million in the second quarter of 2017, representing an increase of 8%. The year-on-year improvement in Adjusted property EBITDA was mainly attributable to the higher contribution from City of Dreams Manila and Altira Macau.
Net income attributable to Melco Resorts & Entertainment Limited for the second quarter of 2018 was US$57.3 million, or US$0.12 per ADS, compared with US$36.5 million, or US$0.08 per ADS, in the second quarter of 2017. The net loss attributable to noncontrolling interests during the second quarters of 2018 and 2017 were US$4.1 million and US$8.0 million, respectively, which were related to Studio City and City of Dreams Manila.
Mr. Lawrence Ho, our Chairman and Chief Executive Officer, commented, "I am delighted to announce the recent successful opening of Morpheus, which we believe is the most luxurious integrated resort in the world. Named after the Greek god of dreams, this US$1.1 billion iconic building is the latest addition to the Phase III development of City of Dreams, exemplifying Melco’s position as a pioneer and innovator in premium travel, leisure and entertainment.
"Morpheus is the world’s first ever free-form exoskeleton high-rise, designed by legendary architect - the late Dame Zaha Hadid. With a total of 772 guest rooms, suites and villas, a sky pool situated 130 meters above ground, the world’s most fashion-forward brands and retail options, an in-house Spa Butler concept, as well as VIP gaming and VIP villas on the top floors, Morpheus offers guests world-class experiences that exceed 5-star hotel standards.
"Morpheus offers best-of-the-best dining options including Alain Ducasse at Morpheus and Voyages by Alain Ducasse, the legendary French chef’s restaurant inspired by his travels. Taste buds will also be awakened by Yi, which offers regional Chinese cuisine served omakase-style, while the king of modern patisserie, Pierre Hermé, has created a sleek lounge serving the finest delicacies never seen before in Asia. Lastly, Morpheus also features a living gallery with original contemporary art by internationally renowned artists KAWS, Jean-Michel Othoniel and Thilo Heinzmann.
"The opening of Morpheus marks a new beginning for City of Dreams. Our premium portfolio now includes the sleek, modern Morpheus; the chic, classic Chinese Nüwa; and the upcoming hotel Libertine, the funky rebel, which starts development in the second half of 2019. They all offer guests premium and luxury experiences but each has its own distinctive style and design while maintaining the same focus on quality and attention to detail.
"At Studio City, we are embarking on a series of property upgrades to refine the entertainment offerings, which include an incredible new stunt show created with our new partner Stufish, a London-based world-renowned entertainment architect, Asia’s largest Virtual Reality zone and a fantastic new street of food and beverage.
"The Board has, after evaluating the Company’s current liquidity position and future expected capital needs, decided to increase the quarterly cash dividend by 7%.
"Lastly, Japan continues to be a core focus for us. We expect development of the next generation of integrated resorts to soon commence in this incredibly exciting, yet currently underpenetrated, tourism destination. With our focus on the Asian premium segment, high quality assets, dedication to world-class entertainment offerings, market-leading social safeguards and compliance culture, and our commitment to being an ideal partner to local governments and communities alike, we believe Melco is in a strong position to help Japan realize the vision for integrated resort development with a unique Japanese touch."