Melco losses narrow as revenue jumps to USD948m
Melco Resorts & Entertainment’s operating revenue for the second quarter of 2023 jumped to USD947.9 million, an increase of approximately 220% from USD296.1 million for the comparable period in 2022.
The increase in total operating revenues is primarily due to improved performance in all gaming segments and non-gaming operations, but is also partially attributable to the relaxation of Covid-19 restrictions in the city, the openings of Studio City Phase 2’s Epic Tower and indoor waterpark in April 2023 and the launch of residency concerts at Studio City in the same month.
Operating income for the second quarter of 2023 was USD64.3 million, compared with an operating loss of USD209.2 million in the second quarter of 2022.
Losses also narrowed as the company reported a net loss of USD23.4 million for the quarter – significantly reduced from the USD251.5 million loss recorded the previous year.
Lawrence Ho, chairman and CEO, said “the strength of our Macau recovery is evident in the 43% increase in gross gaming revenue in the second quarter of 2023 compared to the first quarter of 2023. We’ve seen mass drop increase month-to-month and turnover in our premium direct VIP segment continued to exceed 2019 [levels] during the second quarter.”
Earnings, meanwhile, are still not at a level of gross gaming revenue to produce an increase on the 2019 EBITDA.
This is partially due to the lower-spending customer profile that the business has attracted post-Covid.
“If you look at the air lifts going into Macau right now, it is probably at around 50%,” Ho said in an earnings call, adding that Macau, “over the last six months, since the recovery has started, has become very much a weak end-market.”
Earlier this year, Macau casinos were forced to close thousands of hotel rooms due to labor shortages, with operators unprepared for the opening of borders.
One contributing factor was the lengthy processes for hiring new non-resident workers, as these workers need to come from their country to process employment paperwork.
However, Ho said that labor supply issues in Macau have largely been resolved.
“We have been able to provide our customers with Melco’s full suite of services and amenities. We expect to add another 560 hotel rooms to our portfolio with the opening of W Macau at Studio City in September and are well positioned to support the continuing increase of customers in Macau,” he said.
