Phase 2 of Studio City to open Q2 2023, earnings down 46% y-o-y
The construction of Studio City Phase 2 is progressing on schedule and it is anticipated that the opening will be conducted in stages, beginning in the second quarter of 2023, Lawrence Ho, Melco Resorts & Entertainment Limited’s CEO and chairman said in the company’s third quarter earnings report.
“We will monitor the market closely to determine the appropriate time to open,” he said.
Ho stated that the results for the third quarter of 2022 were impacted by the casino closures in July and the travel restrictions imposed across mainland China and Macau as the city battled its largest Covid-19 outbreak in mid-June to July.
Although borders have reopened, the group considered that the operating environment have remained “challenging given the continuing tight travel restrictions.”
However, the group is encouraged by the recent re-opening of Macau to international tourists from designated countries as well as the increase in visitors over the October Golden Week.
“We are also cautiously optimistic that the granting of eVisas and group visas, which commenced on November 1, 2022, will lead to a gradual increase in visitation,” said Ho.
Total operating revenue for the third quarter of 2022 was USD241.8 million, representing a decrease of approximately 46% from USD446.4 million for the comparable period in 2021.
The decrease in total operating revenue was primarily attributable to the government’s mandated 12-day closure of casinos in July, which led to slower performance in the rolling chip and mass market table games segments.
Melco generated negative adjusted property EBITDA of USD34.9 million in the third quarter of 2022, compared with adjusted property EBITDA of USD31.9 million in the third quarter of 2021.
Meanwhile, Ho considered the gaming proposals for the city’s 10-year gaming concessions to have been a “smooth and transparent process.”
“Our proposal reinforces our commitment to Macau, and we look forward to playing a leadership role in partnering with the Macau government to execute its vision,” Ho said.
Discussions between the gaming commission for the tender and operators will not be made public.
The commission reportedly had its last meeting with bidders in late October.
