Melco 3Q EBITDA down from 2Q, says online ops. begun in Manila

Melco Resorts, City of Dreams

Melco Resorts & Entertainment posted a decline in 3Q21 adjusted EBITDA from the prior quarter due to Covid restrictions in Macau, although its results improved from a year earlier. 

In a review of operations, Melco also announced it had begun online gambling in the Philippines and has abandoned its pursuit of a Japan IR license.

Total operating revenue for the quarter was $446.4 million, more than doubling from the comparable period a year earlier, while it swung back to an adjusted property EBITDA profit of $31.9 million compared with a loss of $76.7 million a year ago.

On a sequential basis, adjusted property EBITDA was down from $79 million in the prior quarter as the contribution from Macau shrivelled to $33 million from $80 million in 2Q21. 

Adjusted EBITDA was $15 million, down from $59 million in the second quarter, but better than the $96 million loss a year earlier. 

“Continued travel restrictions and quarantine measures in Macau and the region negatively impacted our third quarter operating and financial performance,” CEO and Chairman Lawrence Ho said. “To preserve our cash and liquidity, we continue to enforce strong cost control discipline in respect to both operating expenses and capital expenditures.”

“Looking forward, we remain confident that pent-up demand for Macau remains intact and strong.”

In a review of operations, Ho said the company has discontinued its efforts to win a license in Japan and will be closing its offices there in coming months. 

The group was thwarted in its efforts to gain a coveted Japan license after a surprise defeat in the Yokohama gubernatorial race turned in an anti-casino candidate. Still, at the time Ho said Melco was still committed to opportunities in Japan. 

In the Philippines, City of Dreams Manila was operating at a limited capacity until August 5, when Manila was put into lockdown. The alert level and accompanying restrictions have been gradually easing since Sept. 17, when the property resumed operations under limited capacity. 

However, it said it had begun online live dealer operations from August 10 and online slot machines from Sept. 15 after gaining approval from the Philippines Amusement and Gaming Corp. 

The offering is only available to registered clients of City of Dreams Manila, inside the Philippines, it said. 

The 3Q21, total operating revenues at City of Dreams Manila were US$52.5 million, compared to $43.4 million in the third quarter of 2020. City of Dreams Manila generated adjusted EBITDA of $11.7 million, compared with adjusted EBITDA of US$5.2 million in the comparable period of 2020. 

In Europe, where Melco is developing the City of Dreams Mediterranean on Cyprus, Ho said the development is continuing and the opening is on track for the second half of next year. 

It will be Europe’s largest IR with 500 luxury hotels, about 100,000 square feet of MICE space, a family adventure park and fine dining and retail.