Melco’s CEO Lawrence Ho said it had experienced “a progressive recovery in business levels” in Macau during Q2.
Melco Resorts and Entertainment executives stated they are confident in Macau’s recovery, as the company highlighted its ongoing investment programme.
The operator narrowed its operating loss to $128.1m for Q2, compared to the operating loss of $370.8m in the same quarter of last year.
Total operating revenues for the quarter ended 30 June were $566.4m, an increase of around 222 percent from $175.9m for the same period in 2020.
“Our results in the second quarter continue to reflect the pandemic’s impact on the business. However, on a sequential basis, we experienced a progressive recovery in business levels as tourists return to Macau,” said Lawrence Ho, Melco’s chairman and CEO. “As travel restrictions loosen and visitors gradually return, Macau has enjoyed a steady recovery in its integrated resorts industry and its overall economy.”
Sanford C. Bernstein analysts Vitaly Umansky, Louis Li and Kelsey Zhu said Melco Resorts’ Q2 results were “largely in-line” with expectations, noting that the operator’s management was “confident about pent-up demand”.
Melco generated adjusted property EBITDA of $79.1m in Q2, compared to a negative adjusted property EBITDA of $156.3m in the same period last year.
“In Macau, our mass table games operation, which contributes the vast majority of our EBITDA, saw another quarter of sequential improvement. Continuing the trend from last quarter, we delivered positive property EBITDA for our Macau operations and our overall global operations,” Ho continued.
In the Philippines, gaming and hospitality operations at City of Dreams Manila were closed in April as part of lockdown measures. Ho said the property reopened at 50 percent capacity at the start of May and had “seen a strong recovery in pent-up demand, especially led by mass-market patrons”. “As such, we have repositioned some of our gaming space from VIP to premium mass,” he added.
Ho highlighted the company’s commitment to its investment programme in Macau and abroad. “In Macau, construction of Studio City Phase 2 remains ongoing, and we expect its completion no later than December 2022,” he reported.
Upon completion, the Phase 2 expansion will increase Studio City’s hotel room inventory by approximately 60 percent, with two new luxury hotel towers offering approximately 900 luxury hotel rooms and suites. There will be additional gaming space and non-gaming facilities, including a Cineplex, fine dining restaurant, MICE space and one of the world’s largest indoor-outdoor water parks.
“At City of Dreams, the newly renovated Nuwa Hotel reopened on March 31, and we have continued building additional suites and guest rooms at our Morpheus Hotel. The Canton hotel closed at the end of March 2021 and is undergoing a transformation into a luxury hotel that is expected to reopen in 2023,” Ho stated.