Melco’s CEO Lawrence Ho explained that “continued travel restrictions and quarantine measures in Macau”, together with the 42-day closure of City of Dreams Manila in the Philippines impacted Melco’s Q3 results.
Melco Resorts and Entertainment sequentially narrowed its net loss in Q3 to $233.2m, compared to a loss of $185.7m in the previous quarter of 2021. Total operating revenues for the three months to 30 September increased 110 percent year-on-year to $446.4m.
“Continued travel restrictions and quarantine measures in Macau and the region negatively impacted our third quarter operating and financial performance,” said Lawrence Ho, Melco’s chairman and CEO. “To preserve our cash and liquidity, we continue to enforce strong cost control discipline in respect to both operating expenses and capital expenditures.”
Adjusted property EBITDA for the quarter was $31.9m, compared with negative adjusted property EBITDA of $76.7m for the same period last year.
Total operating revenues at City of Dreams were $252m, compared to $91.4m in Q3 2020. The property generated adjusted EBITDA of $32.7m for the quarter, compared with negative adjusted EBITDA of $49.2m for the same period last year. Melco attributed the improvement to “better performance in all gaming segments and non-gaming operations”.
At Studio City, total operating revenues at Studio City were $81.8m for Q3, compared to $30.8m for same quarter of 2020. The resort generated negative adjusted EBITDA of $14m, an improvement from $21.7m last year. The company said the year-over-year change in adjusted EBITDA was “primarily a result of better performance in overall gaming and non-gaming operations”.
“The construction of Studio City Phase 2 is progressing on track for completion before 27 December 2022,” Ho confirmed. “This expansion will offer approximately 900 additional luxury hotel rooms and suites, an additional indoor/outdoor water park which is expected to be one of the largest in the world, a Cineplex, multiple fine-dining restaurants, and state-of-the-art MICE space.”
In the Philippines, total operating revenues at City of Dreams Manila were $52.5m, compared to $43.4m in Q3 last year. The resort generated adjusted EBITDA of $11.7m, up from $5.2m for the comparable period of 2020. The company said the rise in adjusted EBITDA was primarily due to “better performance in the mass market table games and gaming machine segments, partially offset by softer performance in the rolling chip segment”.
“Our gaming and hospitality operations at City of Dreams Manila experienced periods of closure when the government imposed stricter quarantine measures upon their new COVID cases,” Ho noted. “Our gaming operations were closed to the general public for 42 days, from 6 August to 16 September. We subsequently reopened City of Dreams Manila with limited capacity as the authorities incrementally eased quarantine measures.”