International edition
April 17, 2021

Attributable to a softer performance due to the COVID-19 pandemic

Melco reports 85% decrease in third-quarter operating revenues

Melco reports 85% decrease in third-quarter operating revenues
"Our integrated resorts experienced a moderate recovery in business levels during the third quarter, benefiting from the partial resumption of casino operations in Cyprus and Manila and visa issuances by the Mainland Chinese authorities," Ho said.
Macau | 11/09/2020

Total operating revenues for the third quarter of 2020 were US$0.21 billion, representing a decrease of approximately 85% from US$1.44 billion for the comparable period in 2019, which was primarily attributable to softer performance in all gaming segments and non-gaming operations as a result of the COVID-19 pandemic.

M

elco Resorts & Entertainment Limited, a developer, owner, and operator of integrated resort facilities in Asia and Europe, reported last week its unaudited financial results for the third quarter of 2020.

Total operating revenues for the third quarter of 2020 were US$0.21 billion, representing a decrease of approximately 85% from US$1.44 billion for the comparable period in 2019. The decrease in total operating revenues was primarily attributable to softer performance in all gaming segments and non-gaming operations as a result of the COVID-19 pandemic, which resulted in a significant decline in inbound tourism in the third quarter of 2020.

"COVID-19 and the subsequent travel restrictions continue to have a significant negative impact on our operating and financial performance," said Lawrence Ho, Chairman and Chief Executive Officer. "Despite that, our integrated resorts experienced a moderate recovery in business levels during the third quarter, benefiting from the partial resumption of casino operations in Cyprus and Manila, as well as the gradual resumption of visa issuances by the Mainland Chinese authorities under the Individual Visit Scheme (IVS)."

Operating loss for the third quarter of 2020 was US$275.0 million, compared with operating income of US$175.2 million in the third quarter of 2019.

Melco generated negative Adjusted Property EBITDA of US$76.7 million in the third quarter of 2020, compared with Adjusted Property EBITDA of US$418.2 million in the third quarter of 2019.

Net loss attributable to Melco Resorts & Entertainment Limited for the third quarter of 2020 was US$331.6 million, or US$0.70 per ADS, compared with net income attributable to Melco Resorts & Entertainment Limited of US$83.2 million, or US$0.17 per ADS, in the third quarter of 2019. The net loss attributable to noncontrolling interests during the third quarter of 2020 was US$55.3 million and the net income attributable to noncontrolling interests during the third quarter of 2019 was US$8.9 million, all of which were related to Studio City, City of Dreams Manila, and the Cyprus Operations.

"While we are encouraged by the recent positive developments, ensuring the safety and well-being of our colleagues, customers and communities in which we operate remains our highest priority. Melco also fully supports the Macau SAR government’s newly launched scheme for tourists from Mainland China with the aim to expand the number of visitors, boost the economy and protect local jobs," Ho continued. "In support of the scheme, Melco strives to continue prioritizing epidemic prevention measures by working hand-in-hand with local small and medium enterprise (SME) partners, while contributing collaboratively to the city’s sustainable development and economic recovery."

"We continue to prudently manage our balance sheet. Aided by the issuance of a series of new senior notes and the Studio City private share placements (but excluding Melco’s subscription therein of approximately US$280 million), as of September 30, 2020, we had cash on hand of approximately US$1.9 billion and undrawn revolver capacities of approximately US$1.7 billion.

"Melco remains committed to its global development program. Construction on the expansion of Studio City is progressing. Upon completion, Studio City will offer approximately 900 additional luxury hotel rooms and suites, one of the world’s largest indoor/outdoor water parks, a Cineplex, fine-dining restaurants and state-of-the-art MICE space. In Europe, we are developing City of Dreams Mediterranean which, upon completion, will be Europe’s largest integrated resort with approximately 500 luxury hotel rooms, a 1,500-seat amphitheater, and approximately 10,000 square meters of MICE space.

"Turning to Japan, I want to highlight our unwavering commitment to bring to the country the best IR the world has ever seen. We believe our focus on the Asian premium segment, a portfolio of high-quality assets, devotion to craftsmanship, dedication to world-class entertainment offerings, market-leading social safeguard systems, established track record of successful partnerships, a culture of exceptional guest service, and a continuing commitment to employee development puts Melco in a strong position to help Japan realize the vision of developing a world-leading IR with unique Japanese touch. The process in Japan has been substantially delayed and remains complex. We will continue to be patient as we evaluate the landscape to ensure that Melco pursues the right opportunity that takes advantage of Melco’s core strengths to drive strong value creation," Ho concluded.

City of Dreams Third Quarter Results

For the quarter ended September 30, 2020, total operating revenues at City of Dreams were US$91.4 million, compared to US$787.3 million in the third quarter of 2019. City of Dreams generated negative Adjusted EBITDA of US$49.2 million in the third quarter of 2020, compared with Adjusted EBITDA of US$233.0 million in the third quarter of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of softer performance in all gaming segments and lower non-gaming revenue, as well as a higher provision for credit losses.

Rolling chip volume was US$1.86 billion for the third quarter of 2020 versus US$17.18 billion in the third quarter of 2019. The rolling chip win rate was 3.34% in the third quarter of 2020, versus 2.69% in the third quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop decreased to US$90.1 million in the third quarter of 2020, compared with US$1.41 billion in the third quarter of 2019. The mass market table games hold percentage was 38.1% in the third quarter of 2020, compared to 33.2% in the third quarter of 2019.

Gaming machine handle for the third quarter of 2020 was US$0.11 billion, compared with US$1.21 billion in the third quarter of 2019. The gaming machine win rate was 3.4% in the third quarter of 2020, versus 3.1% in the third quarter of 2019.

Total non-gaming revenue at City of Dreams in the third quarter of 2020 was US$18.0 million, compared with US$104.2 million in the third quarter of 2019.

Altira Macau Third Quarter Results

For the quarter ended September 30, 2020, total operating revenues at Altira Macau were US$11.0 million, compared to US$113.9 million in the third quarter of 2019. Altira Macau generated negative Adjusted EBITDA of US$16.8 million in the third quarter of 2020, compared with Adjusted EBITDA of US$14.1 million in the third quarter of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of softer performance in all gaming segments.

Rolling chip volume was US$0.34 billion in the third quarter of 2020 versus US$4.05 billion in the third quarter of 2019. The rolling chip win rate was 3.06% in the third quarter of 2020, versus 3.62% in the third quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15%.

In the mass market table games segment, drop was US$15.7 million in the third quarter of 2020, versus US$154.2 million in the third quarter of 2019. The mass market table games hold percentage was 16.9% in the third quarter of 2020, compared with 21.6% in the third quarter of 2019.
    
Gaming machine handle for the third quarter of 2020 was US$42.6 million, compared with US$79.4 million in the third quarter of 2019. The gaming machine win rate was 2.3% in the third quarter of 2020, versus 4.2% in the third quarter of 2019.

Total non-gaming revenue at Altira Macau in the third quarter of 2020 was US$2.2 million, compared with US$6.8 million in the third quarter of 2019.

Mocha Clubs Third Quarter Results

Total operating revenues from Mocha Clubs were US$11.3 million in the third quarter of 2020, compared to US$29.5 million in the third quarter of 2019. Mocha Clubs generated negative Adjusted EBITDA of US$0.5 million in the third quarter of 2020, compared with Adjusted EBITDA of US$6.3 million in the same period in 2019.

Gaming machine handle for the third quarter of 2020 was US$279.6 million, compared with US$633.6 million in the third quarter of 2019. The gaming machine win rate was 4.0% in the third quarter of 2020, versus 4.7% in the third quarter of 2019.

Studio City Third Quarter Results

For the quarter ended September 30, 2020, total operating revenues at Studio City were US$30.8 million, compared to US$337.7 million in the third quarter of 2019. Studio City generated negative Adjusted EBITDA of US$21.7 million in the third quarter of 2020, compared with Adjusted EBITDA of US$106.4 million in the third quarter of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of softer performance in all gaming segments and lower non-gaming revenue.

Studio City’s rolling chip volume was US$0.15 billion in the third quarter of 2020, versus US$2.77 billion in the third quarter of 2019. The rolling chip win rate was 3.41% in the third quarter of 2020, versus 2.71% in the third quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop decreased to US$49.7 million in the third quarter of 2020, compared with US$880.6 million in the third quarter of 2019. The mass market table games hold percentage was 31.5% in the third quarter of 2020, compared to 28.4% in the third quarter of 2019.

Gaming machine handle for the third quarter of 2020 was US$99.2 million, compared with US$711.2 million in the third quarter of 2019. The gaming machine win rate was 2.7% in the third quarter of 2020, versus 2.8% in the third quarter of 2019.

Total non-gaming revenue at Studio City in the third quarter of 2020 was US$11.5 million, compared with US$49.4 million in the third quarter of 2019.

City of Dreams Manila Third Quarter Results

For the quarter ended September 30, 2020, total operating revenues at City of Dreams Manila were US$43.4 million, compared to US$130.5 million in the third quarter of 2019. City of Dreams Manila generated Adjusted EBITDA of US$5.2 million in the third quarter of 2020, compared with Adjusted EBITDA of US$49.9 million in the comparable period of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of softer performance in all gaming segments and lower non-gaming revenue.

City of Dreams Manila’s rolling chip volume was US$0.56 billion in the third quarter of 2020, versus US$2.44 billion in the third quarter of 2019. The rolling chip win rate was 2.68% in the third quarter of 2020, versus 0.89% in the third quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop decreased to US$63.8 million for the third quarter of 2020, compared with US$202.1 million in the third quarter of 2019. The mass market table games hold percentage was 29.0% in the third quarter of 2020, compared to 31.3% in the third quarter of 2019.

Gaming machine handle for the third quarter of 2020 was US$0.29 billion, compared with US$1.02 billion in the third quarter of 2019. The gaming machine win rate was 5.8% in the third quarter of 2020, versus 5.3% in the third quarter of 2019.

Total non-gaming revenue at City of Dreams Manila in the third quarter of 2020 was US$8.7 million, compared with US$32.3 million in the third quarter of 2019.

Cyprus Operations Third Quarter Results

The Company is currently operating a temporary casino, the first casino in the Republic of Cyprus, and is licensed to operate four satellite casinos. Upon the completion and opening of City of Dreams Mediterranean, the Company will continue to operate the satellite casinos while operation of the temporary casino will cease.

For the quarter ended September 30, 2020, total operating revenues at Cyprus Casinos were US$20.5 million, compared to US$26.7 million in the third quarter of 2019. Cyprus Casinos generated Adjusted EBITDA of US$6.3 million in the third quarter of 2020, compared with US$8.5 million in the third quarter of 2019. The year-over-year decrease in Adjusted EBITDA was primarily a result of softer performance in the rolling chip and mass-market table games segments.

Rolling chip volume was US$0.2 million for the third quarter of 2020, versus US$38.9 million in the third quarter of 2019. The rolling chip win rate was negative 36.03% in the third quarter of 2020, versus 8.66% in the third quarter of 2019. The expected rolling chip win rate range is 2.85% - 3.15%.

Mass market table games drop was US$23.3 million in the third quarter of 2020, versus US$36.2 million in the third quarter of 2019. The mass-market table games hold percentage was 20.6% in the third quarter of 2020, compared to 21.9% in the third quarter of 2019.

Gaming machine handle for the third quarter of 2020 was US$307.5 million, compared with US$311.5 million in the third quarter of 2019. The gaming machine win rate was 5.1% in the third quarter of 2020, versus 5.0% in the third quarter of 2019.

See the company's full Unaudited Third Quarter 2020 Earnings.

Leave your comment
Newsletter Subscription
Subscribe to receive the latest news and updates
Enter a valid email
Complete the captcha
Thank you for registering to our newsletter.