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Debt reductions on track to improve Melco’s financial stability: CEO

A debt reduction of some $250 million has helped Melco Resorts & Entertainment to mitigate its refinancing risks and bolster the company’s financial stability, says the group’s CEO Lawrence Ho in its recent conference call.

According to Ho, the company embarked on extensive renovations, re-configuring gaming areas, and launching multiple retail outlets at Studio City, enhancing the overall guest experience.

Studio City, Cotai strip, Macau
Studio City

Melco Resorts announced robust financial results for the first quarter of 2024, reflecting a significant uptick in operating revenues and profitability compared to the same period in 2023.

“On the financing side, we paid down another $250 million in debt, raised $750 million in bonds and extended the maturity of our $1.9 billion revolving credit facility, significantly reducing our refinancing risk in 2025. We had a slow start in January but we recovered in February in part due to Chinese New Year,” Ho commented on the financial results conference call.

Total debt held by Melco at the end of the first quarter of 2024 amounted to $7.32 billion. Last month the group announced that it had successfully priced an international offering of senior unsecured notes for an aggregate principal amount of $750 million at a coupon of 7.625 percent due 2032

The executive pointed out improvement in our performance in March and April reflected steps that we’ve taken towards regaining our leadership position in premium mass, with Melco Macau’s first quarter property EBITDA reaching 89 percent of 2019.

Total operating revenues for the first quarter of 2024 reached $1.11 billion, marking a increase of approximately 55 percent from the $716.5 million reported in the corresponding period last year.

This surge in revenues was attributed to improved performance across all gaming segments and non-gaming operations, fueled by the ongoing recovery in inbound tourism to Macau during the quarter.

Operating income for the first quarter of 2024 surged to $125.4 million, a substantial improvement compared to the operating income of $0.4 million recorded in the first quarter of 2023.

Furthermore, Melco reported an Adjusted Property EBITDA of $298.8 million for the first quarter of 2024, growing from from $190.8 million reported in the same period last year.

Net income attributable to Melco Resorts & Entertainment Limited for the first quarter of 2024 amounted to $15.2 million, or $0.03 per ADS, while net loss attributable to non-controlling interests stood at $14.6 million for the first quarter of 2024, compared to $19.4 million in the same period last year, with the figures related to Studio City, City of Dreams Manila, and City of Dreams Mediterranean and other operations.

“Despite a sluggish start in January, Melco rebounded in February, driven in part by Chinese New Year festivities. March and April witnessed notable performance improvements […] Furthermore, both COD Macau and Studio City achieved record-high mass table game revenues in March, followed by an uptick in market share and daily gaming revenue in April,” Ho stated.

“We remain extremely optimistic about Macau’s continued growth potential. Various initiatives recently announced by the Chinese government, such as the multi-entry group tour visas between Macau and Hengqin, the new cities added to the IVS program in March.”

In the Philippines, City of Dreams Manila was said to have continued to deliver solid results in mass table games and slots, albeit facing challenges in the VIP segment, while City of Dreams Mediterranean and satellite casinos in Cyprus exhibited positive EBITDA and cash flow during the first quarter.

Nelson Moura
Nelson Mourahttp://agbrief.com
Editor and reporter with 10 years of experience in Greater China, namely Taiwan and Macau, in printed and online media, with a focus on finance, gaming, politics, crime, business and social issues.

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