International edition
September 26, 2021

According to the firm’s unaudited financial results

Melco reports 74 percent increase in operating income in Q2 2019

Melco reports 74 percent increase in operating income in Q2 2019
"During the second quarter of 2019, all of Melco’s Macau Integrated Resorts delivered strong mass table games revenue growth," Mr. Lawrence Ho, Chairman and Chief Executive Officer
Macau | 07/26/2019

Operating income for the second quarter of 2019 was US$205.3 million, which compared with the US$118.1 million in the second quarter of 2018, represents a 74% rise.

M

elco Resorts & Entertainment Limited, the developer, owner and operator of casino gaming and entertainment casino resort facilities in Asia, reported Wednesday its unaudited financial results for the second quarter of 2019.

Total operating revenues for the second quarter of 2019 were US$1,442.7 million, representing an increase of approximately 17% from US$1,228.6 million for the comparable period in 2018. The increase in total operating revenues was primarily attributable to better performance in the rolling chip and mass market table games segments and higher non-gaming revenue as a result of the opening of Morpheus in June 2018.

Operating income for the second quarter of 2019 was US$205.3 million, compared with operating income of US$118.1 million in the second quarter of 2018, representing an increase of 74%.

Adjusted property EBITDA was US$442.2 million for the second quarter of 2019 compared to Adjusted property EBITDA of US$355.5 million in the second quarter of 2018, representing an increase of 24%.

Net income attributable to Melco Resorts & Entertainment Limited for the second quarter of 2019 was US$100.3 million, or US$0.22 per ADS, compared with US$57.3 million, or US$0.12 per ADS, in the second quarter of 2018. The net loss attributable to noncontrolling interests during the second quarter of 2019 and 2018 were US$3.0 million and US$4.1 million, respectively, which were related to Studio City and City of Dreams Manila.

Mr. Lawrence Ho, Chairman and Chief Executive Officer, commented, “During the second quarter of 2019, all of Melco’s Macau Integrated Resorts delivered strong mass table games revenue growth, which drove Group-wide Property EBITDA to expand approximately 24% year-over-year to an all-time-high of US$442 million.

“The further ramp-up of the award-winning Morpheus and opening of the new VIP area on the second floor helped City of Dreams deliver a strong set of results in the second quarter of 2019, with VIP volumes, mass table gaming revenue and Property EBITDA all experiencing significant growth.

“During the second quarter, Studio City and Altira also delivered strong mass table gaming revenue growth, highlighting strength in Macau’s mass gaming market and Melco’s dominant foothold in the city’s mass and premium mass gaming segments.

“Melco’s dedication to excellence has been widely recognized, most recently by the 2019 Asia Pacific Property Awards with Morpheus being awarded as the winner of Best Hotel Architecture Macau and Best New Hotel Construction & Design Macau. ‘The House of Dancing Water’, Melco’s award-winning show, has also been recognized by Global Gaming Expo (G2E) Asia Awards 2019 as the Best Integrated Resorts Non-Gaming Attraction. These recognitions have positioned Melco as a leading integrated resort operator in Asia.

“At Studio City, we continue to enhance our entertainment offerings with a series of property upgrades, which include the opening of the pop-up ‘Legend Heroes Park’ in January, the ‘Show House’ Night Club in February and the ‘Flip Out’ Trampoline Park in May. Soon, we will open the permanent, 50,000 square feet Legend Heroes VR Park, which should be Asia’s largest Virtual Reality Zone.

“The Board has, after evaluating the Company’s current liquidity position and future expected capital needs, decided to increase the quarterly cash dividend by 6% to US$0.05504 per ordinary share, which is equivalent to US$0.16512 per ADS, from the previous quarterly dividend of US$0.0517 per ordinary share.

“In May 2019, the Company announced its agreement to acquire a 19.99% stake in Crown Resorts Limited from CPH Crown Holdings Pty Limited. We believe Melco’s investment in Crown is an incredible opportunity to purchase a strategic stake in what we believe to be Australia’s premier provider of true integrated resort experiences.

“In June 2019, the Company announced its agreement to acquire from Melco International Development Limited all of Melco International’s holdings of ordinary shares of ICR Cyprus Holdings Limited, which represents a 75% equity interest in ICR Cyprus. ICR Cyprus and its subsidiaries are developing the City of Dreams Mediterranean integrated destination resort project in Cyprus. The City of Dreams Mediterranean project is currently under development and scheduled to open in 2021, upon which it is expected to be the largest and premier integrated destination resort in Europe.

“Lastly, Japan continues to be a core focus for us. In May, we released designs of our proposed Osaka Integrated Resort – City of the Future. We have also participated in the Yokohama RFI and will participate in the Osaka RFC. 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 a vision for an integrated resort development with unique Japanese touch.”

City of Dreams Second Quarter Results

For the quarter ended June 30, 2019, total operating revenues at City of Dreams were US$790.8 million compared to US$577.8 million in the second quarter of 2018. City of Dreams generated Adjusted EBITDA of US$250.8 million in the second quarter of 2019 compared with Adjusted EBITDA of US$171.5 million in the second quarter of 2018. The year-over-year increase in Adjusted EBITDA was primarily a result of better performances in the rolling chip and mass market table games segments.

Rolling chip volumes totaled US$14.9 billion for the second quarter of 2019 versus US$10.5 billion in the second quarter of 2018. The rolling chip win rate was 3.16% in the second quarter of 2019 versus 2.88% in the second quarter of 2018. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop increased to US$1,372.2 million in the second quarter of 2019 compared with US$1,182.4 million in the second quarter of 2018. The mass market table games hold percentage was 31.6% in the second quarter of 2019 compared to 28.4% in the second quarter of 2018.

Gaming machine handle for the second quarter of 2019 was US$1,037.8 million, compared with US$1,116.9 million in the second quarter of 2018. The gaming machine win rate was 3.8% in the second quarter of 2019 versus 5.1% in the second quarter of 2018.

Total non-gaming revenue at City of Dreams in the second quarter of 2019 was US$98.4 million, compared with US$77.0 million in the second quarter of 2018.

Altira Macau Second Quarter Results

For the quarter ended June 30, 2019, total operating revenues at Altira Macau were US$104.3 million compared to US$123.1 million in the second quarter of 2018. Altira Macau generated Adjusted EBITDA of US$8.5 million in the second quarter of 2019 compared with Adjusted EBITDA of US$18.3 million in the second quarter of 2018. The decline in Adjusted EBITDA was primarily a result of softer performance in the rolling chip segment.

Rolling chip volumes totaled US$4.4 billion in the second quarter of 2019 versus US$4.8 billion in the second quarter of 2018. The rolling chip win rate was 2.95% in the second quarter of 2019 versus 3.65% in the second quarter of 2018. The expected rolling chip win rate range is 2.85% - 3.15%.

In the mass market table games segment, drop totaled US$150.0 million in the second quarter of 2019 versus US$131.9 million in the second quarter of 2018. The mass market table games hold percentage was 22.5% in the second quarter of 2019 compared with 19.7% in the second quarter of 2018.

Gaming machine handle for the second quarter of 2019 was US$83.5 million, compared with US$30.0 million in the second quarter of 2018. The increase was primarily due to an increase in average number of gaming machines to 171 in the second quarter of 2019, compared to 129 in the second quarter of 2018. The gaming machine win rate was 4.4% in the second quarter of 2019 versus 6.3% in the second quarter of 2018.

Total non-gaming revenue at Altira Macau in the second quarter of 2019 was US$6.6 million, compared with US$6.7 million in the second quarter of 2018.

Mocha Clubs Second Quarter Results

Total operating revenues from Mocha Clubs totaled US$28.9 million in the second quarter of 2019 as compared to US$28.0 million in the second quarter of 2018. Mocha Clubs generated US$5.3 million of Adjusted EBITDA in the second quarter of 2019 compared with US$5.2 million in the same period in 2018.

Gaming machine handle for the second quarter of 2019 was US$609.4 million, compared with US$618.5 million in the second quarter of 2018. The gaming machine win rate was 4.8% in the second quarter of 2019 versus 4.5% in the second quarter of 2018.

Studio City Second Quarter Results

For the quarter ended June 30, 2019, total operating revenues at Studio City were US$328.9 million compared to US$314.1 million in the second quarter of 2018. Studio City generated Adjusted EBITDA of US$94.8 million in the second quarter of 2019 compared with Adjusted EBITDA of US$73.2 million in the second quarter of 2018. The increase in Adjusted EBITDA was primarily a result of better performance in the mass market table games segment, partially offset by a softer performance in the rolling chip segment and lower non-gaming revenue.

Affected by the Macau market-wide VIP weakness, and by increasing competition in and around Cotai, Studio City’s rolling chip volumes totaled US$3.1 billion in the second quarter of 2019 versus US$6.1 billion in the second quarter of 2018. The rolling chip win rate was 2.76% in the second quarter of 2019 versus 2.66% in the second quarter of 2018. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop increased to US$877.0 million in the second quarter of 2019 compared with US$814.3 million in the second quarter of 2018. The mass market table games hold percentage was 29.2% in the second quarter of 2019 compared to 24.5% in the second quarter of 2018.

Gaming machine handle for the second quarter of 2019 was US$630.9 million, compared with US$614.9 million in the second quarter of 2018. The gaming machine win rate was 3.2% in the second quarter of 2019 versus 3.4% in the second quarter of 2018.

Total non-gaming revenue at Studio City in the second quarter of 2019 was US$36.9 million, compared with US$44.3 million in the second quarter of 2018.

City of Dreams Manila Second Quarter Results

For the quarter ended June 30, 2019, total operating revenues at City of Dreams Manila were US$176.1 million compared to US$173.9 million in the second quarter of 2018. City of Dreams Manila generated Adjusted EBITDA of US$82.8 million in the second quarter of 2019 compared to US$87.3 million in the comparable period of 2018.

With increased competition in the market, City of Dreams Manila’s rolling chip volumes totaled US$1.9 billion in the second quarter of 2019 versus US$3.0 billion in the second quarter of 2018. The rolling chip win rate was 5.21% in the second quarter of 2019 versus 3.70% in the second quarter of 2018. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop decreased to US$192.8 million for the second quarter of 2019, compared with US$196.9 million in the second quarter of 2018. The mass market table games hold percentage was 30.4% in the second quarter of 2019 compared to 29.4% in the second quarter of 2018.

Gaming machine handle for the second quarter of 2019 was US$945.1 million, compared with US$855.9 million in the second quarter of 2018. The gaming machine win rate was 5.4% in the second quarter of 2019 versus 5.9% in the second quarter of 2018.

Total non-gaming revenue at City of Dreams Manila in the second quarter of 2019 was US$31.8 million, compared with US$29.2 million in the second quarter of 2018.

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