Melco Resorts & Entertainment slumped to a net loss of US$364 million in the first quarter of 2020, down from income of US$120.1 million in 1Q19 as the closure of its properties in Macau, Manila and Cyprus, along with ongoing border restrictions between Macau and China, take their toll.
With group-wide GGR down 40% to US$964 million, Adjusted Property EBITDA fell 82% to US$75 million, although it could have been worse if not for high hold in the VIP segment. Normalized EBITDA was US$12 million.
In a statement published alongside the company’s results announcement, Chairman and CEO Lawrence Ho revealed Melco had made the decision to suspend its quarterly dividend program in order to preserve liquidity, describing it as “a prudent course of action given current conditions.”
He added, “Melco continues to manage its balance sheet in a prudent manner. As of 31 March 2020, we had cash and cash equivalents of over US$1.2 billion.
“With the entry into a new senior facilities agreement in April 2020, we have undrawn revolver capacity of approximately US$1.6 billion. In addition, we further bolstered our balance sheet with our sale of the shares we held in Crown Resorts Limited, resulting in gross sales proceeds of approximately US$355 million.”
For further opinion on the Crown transaction, see Melco’s sale of 9.99% Crown stake – losing a battle to win the war?
Property predicament
At flagship property City of Dreams Macau, total operating revenues fell 34.4% to US$467.7 million, with Adjusted EBITDA down from US$228.6 million in 1Q19 to US$61.0 million.
Rolling chip volume fell 15.6% to US$8.65 billion although VIP GGR actually increased slightly to US$356 million due to a high 4.11% win rate.
Mass table drop plummeted 56.7% to US$570 million with win down a similar amount to US$192 million, while slot machine handle fell 48.0% to US$520 million with win of US$20 million.
Studio City saw its operating revenues fall 58% to US$136.6 million with Adjusted EBITDA down from US$96.4 million to US$9.4 million.
Rolling chip volume was down 48.2% to US$1.38 billion in 1Q20 with VIP win falling 49.8% to US$45 million.
Mass market table drop decreased to US$352.8 million, from US$851.4 million in 1Q19, while mass win fell 62.2% to US$91 million. Slot machine handle was down 44.5% to US$311 million with hold of US$10 million.
At Altira, GGR fell 63% to US$82 million while Mocha Clubs suffered a 42% decline to US$18 million.
In the Philippines, City of Dreams Manila saw operating revenues fall 22.5% year-on-year to US$110.3 million and Adjusted EBITDA by 51.1% to US$29.6 million.
Rolling chip volume fell 49.4% to US$1.16 billion but like its Macau counterpart was aided by a higher win rate of 3.72%. VIP GGR was down 40.8% to US$43 million. Mass table drop declined 14.7% to US$157 million with mass GGR down 8.4% to US$52 million, while gaming machine handle was down only slightly to US$859.2 million, with win of US$36 million.
Melco’s Cyprus casinos, comprising four satellite casinos and its temporary facility near the site of under-construction City of Dreams Mediterranean, produced total operating revenues of US$18.8 million compared to US$21.3 million in 1Q19.
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