Melco Resorts and Entertainment has become the latest group to reiterate optimism in an imminent uptick across Macau after restrictions across the wider region caused sustained struggles through the past year’s fourth quarter and full-year.
Total revenue in the former of those reporting timeframes dropped 30 per cent to $337.1m (2021: $480.6m), with each of the City of Dreams and Altira Macau tracking decreases of 43.13 per cent and 32.33 per cent to $139.2m (2021: $244.8m) and $9m (2021: $13.3m), respectively.
This, the casino operator said, was primarily attributable to the heightened travel restrictions in Macau and mainland China related to COVID-19, which led to softer performance in the rolling chip and mass market table games segments.
However, recent developments, which sees travellers arriving from Mainland China, Hong Kong and Taiwan no longer required to present negative tests, have been praised. In addition, from February 27, 2023, masks are no longer required in outdoor places.
However, despite a significant uptick in Macau’s gross gaming revenue being tracked from MOP 3.5bn in December 2022 to MOP 11.6bn in January 2023, a warning was issued by the group.
Despite quarantine-free travel within Greater China resuming, the pace of recovery remains uncertain and disruptions caused by the outbreak continue to have a material adverse impact on Melco’s operations, financial position and future prospects into the first quarter of the current year.
“We pledge our full support to the sustainable and diversified development of the tourism and leisure industry in Macau”
Lawrence Ho, Chair and Chief Executive Officer, explained: “Our results for the fourth quarter of 2022 continued to be impacted by the travel restrictions imposed across mainland China and Macau.
“However, we are encouraged by the increased visitation and volume that we have seen since the travel restrictions between mainland China and Macau were relaxed on January 8, 2023.
“Our recent performance reinforces our belief in the return of pent-up demand and our view that Macau will continue to develop as a leading international destination for entertainment and leisure.
“We are honoured to have been awarded a gaming concession to continue to operate in Macau for the next 10 years. We greatly appreciate the consideration given to our proposal and our investment two propositions that we believe will continue to build on our existing strengths in entertainment and non-gaming attractions.
“We pledge our full support to the sustainable and diversified development of the tourism and leisure industry in Macau, and will continue to work with the Macau government, the community, and stakeholders to contribute to the city’s development as a leading global tourism destination.”
Elsewhere on the revenue front, City of Dreams Manilla saw revenue increase 13.46 per cent to $95.2m (2021: $83.9m), while Cyprus casinos closed at $28.7m, up 28.12 per cent from $22.4m year-on-year.
On a full-year basis, revenue dropped 48.8 per cent to $1.35bn (2021: 2.01bn), driven by the array of aforementioned struggles that were encountered through Q4.
“…we are encouraged by the increased visitation and volume that we have seen since the travel restrictions between mainland China and Macau were relaxed”
“Gaming volumes in the Philippines have reached close to pre-pandemic levels, and volumes in Cyprus have exceeded those we had seen pre-pandemic,” Ho noted.
“We are optimistic about continued growth in the Philippines and Cyprus as international travel normalises.”
Operating loss through Q4 swelled to $199.5m (2021: $104.4m), with this trend following suit on an FY basis after tracking $743.1m (2021: $577.5m). Net loss followed suit after closing at $159.9m (2021: $251.9m) and $930.5m (2021: $811.8m), respectively.
Adjusted EBITDA also recorded significant struggles through each time frame, with Q4 seeing a loss of $6.8m recorded contrasted to $94m YoY, while for 2021 as a whole this came in at $600,000 (2021: $235.1m).
To conclude, Ho offered an update on the group’s current expansion projects: “In respect to our development projects, we expect Studio City phase two to open in the second quarter of 2023.
“The first stage of opening is expected to include one of our hotel towers and the indoor water park, which is expected to be the largest of its kind in Asia.
“The second phase of opening is expected to be in the third quarter. In Cyprus, we have been informed that the Council of Ministers has approved an extension of the deadline to open City of Dreams Mediterranean under the terms of our gaming licence to June 30, 2023, and we continue to work with our contractors with a target to open within that time frame.”
