Melco 18Q4 results above estimates

Melco Resorts & Entertainment reported 18Q4 results above estimates as a result of better hold across all of its properties.

Revenue gained five percent in 18Q4 reaching $1.4 billion, with the company attributing the increase to higher group-wide rolling chip and mass market table games revenue. The result were in line with estimates from Bernstein.

Net income rose to $128.0 million, or $0.27 per ADS, compared with $81.2 million, or $0.17 per ADS, in the fourth quarter of 2017.  

“Opening of the iconic, award-winning Morpheus, and the continued robust growth in Macau’s mass gaming market have allowed Melco to deliver record-level property EBITDA despite the challenging macro environment,” Chairman and CEO Lawrence Ho said.

Property EBITDA was 425 million, an increase of 26 percent year-on-year, and 10 percent above consensus.

“The opening of Morpheus only marks the beginning of the relaunch of City of Dreams. On top of that, we have recently unveiled the significantly upgraded VIP gaming spaces on the second floor of City of Dreams. Rolling refurbishment of Nüwa will also soon commence with the upgraded hotel rooms expected to come online over the next eighteen months.”

18Q4 net revenue at City of Dreams was $724.5 million up from $612.6 million a year earlier, with adjusted EBITDA of $229.7 million compared with $169.7 million.

Rolling chip volume totaled $11.4 billion for both quarters ended December 31, 2018 and 2017. Mass market table games drop increased to $1.3 billion from $1.2 billion.

Net revenue at Studio City was $340.7 million compared to $369.0 million in the fourth quarter of 2017. Studio City generated adjusted EBITDA of $102.7 million compared with $91.5 million a year earlier

Net revenue at City of Dreams Manila was $155.2 million compared to $167.5 million, with adjusted EBITDA of $67.9 million compared to $53.8 million in the comparable period of 2017. The company said the year-on year increase in adjusted EBITDA was mainly attributable to better performance in all gaming segments.

Rolling chip volume totaled $2.4 billion versus $2.9 billion. Mass market table games drop increased to $197.3 million compared with $189.2 million.

“Year to date, MLCO is the best performing stock among the six Macau gaming operators,” said analysts from Bernstein.

“We see momentum in MLCO stock price sustainable, contingent upon continued improvement and ramp up particularly at COD, and strength in Premium Mass.”