Melco International Development Ltd, the parent company of Melco Resorts Ltd, has seen its net revenue surge by 260% to HK$20.1 billion and Adjusted EBITDA grow 290% to HK$4.7 billion for the first six months of 2017 amid impressive results in both Macau and the Philippines.
The period included a substantial investment by the company in Melco Resorts, which saw its total stake increase from 34.29% earlier in the year to 51.22% by 30 June 2017.
“Revenue of the Group for the six-month period ended 30 June 2017 increased over 260% following the consolidation of Melco Resorts’ results from May 2016 onwards,” Melco International Development said in a fling to the Hong Kong Stock Exchange.
“Revenue generated from Melco Resorts’ established Casino and Hospitality segment in both Macau and the Philippines became a key revenue stream of the group.”
Melco Resorts’ contribution came on the back of net revenue of US$2.6 billion for the six-month period ended 30 June 2017, up from US$2.2 billion for the same period in 2016, while consolidated Adjusted Property EBITDA grew by more than 38.2% to US$682.8 million. Both improvements were mainly attributable to improved performance in the group-wide rolling chip and mass market table games segments.
HK$18.7 billion of Melco International Development’s revenue through 1H17, roughly 93%, was derived via its gaming interests. Melco Resorts operates its flagship City of Dreams properties in Macau and Manila as well as Studio City, Altira Macau and Mocha Clubs – an electronic gaming machine operator based in Macau.
Melco International Development also boosted its stake in EGT – which owns and leases electronic gaming machines on a revenue sharing basis in the Philippines – from 64.84% to 100% in June.
“In the first half of 2017, Melco International undertook several milestone decisions to position the business long-term to continue capturing future growth – both in Macau and around the world,” the company said. “The group is now more strongly placed to advance our mission of leading the world in leisure and entertainment.
“In February 2017, Melco International completed the purchase of additional interest in, thereby assuming majority ownership of, Melco Resorts & Entertainment Limited. This move was a clear demonstration of our faith in Macau’s long-term growth potential, as well as in driving our core business in integrated resorts. With our formal relationship with Crown Resorts Limited having concluded in May, it also marked the completion of the world’s most successful global gaming partnership.”
Melco International said its primary focus moving forward was on boosting its mass and premium mass presence in Macau as well as actively pursuing a gaming license in Japan.
“Melco International has taken major steps in recent months to advance our support of the development of world-class integrated resorts around the world – and especially in Japan,” it said. “In February, the group unveiled the inspiration behind the potential concept for a Japanese integrated resort celebrating the best of Japan and its culture.
“We also reaffirmed that our commitment to Japan is for the long term, pledging to work with the Japanese government, as well as local partners and communities.
“Long-term, we remain focused in Macau on the mass segment as a sustainable driver for both growth and profit. We will also continue to invest in enhancing our exposure to both VIP and mass gamers, as well as the broader tourism market.
“We also expect Studio City’s overall visitor numbers and foot traffic to improve once the Macau Light Rail project is completed (which is currently expected in 2019) given its strategic location in Cotai as the only property directly adjacent to the Lotus Bridge immigration checkpoint which links Cotai with Hengqin Island in Zhuhai and one of the few dedicated Cotai hotel-casino resort stops planned on the Macau Light Rail Transit Line.
“City of Dreams, meanwhile, will further reinforce its competitive position in the premium-mass segment upon the launch of Morpheus, which is on track to have its grand opening in the first half of 2018. This final development phase for our flagship resort will add almost 800 luxury rooms, suites and villas to complement a unique array of new restaurant concepts, all designed to capture greater non-gaming spend from the increasingly influential premium-mass consumer.
“While a luxury hotel and entertainment concept targeted squarely at the top of the market, the new City of Dreams hotel tower Morpheus will also help defend City of Dream’s leading premium-mass market share within the increasingly competitive Cotai landscape. The Zaha Hadid-designed concept building will become a landmark and global tourist attraction upon completion.
“It will also embody the group’s commitment to support Macau’s ongoing transformation into a World Centre of Tourism and Leisure. Over the remainder of this year, we will remain focused on keeping construction on track and securing relevant approvals for its timely launch in 2018.”
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