Melco focusing on liquidity management after ninth straight quarter of losses in 1Q22

The Chairman and CEO of Melco Resorts & Entertainment Limited stressed that “disciplined cash management” was an ongoing priority after the company announced a net loss of US$183.3 million for the three months ending 31 March 2022 – the ninth consecutive quarter of significant losses.

Although the loss was reduced from the loss of US$232.9 million recorded in the first quarter of 2021 due to lower expenses, group-wide revenue for the period decreased by 8% year-over-year to US$474.9 million due to ongoing COVID-19 restrictions affecting its operations in Macau. This figure was also 65% lower than the US$1.36 billion revenue recorded in 1Q19.

Adjusted real estate EBITDA of US$56.0 million improved from US$30.1 million in the first quarter of 2021.

Addressing the results, Lawrence Ho said they “continue to reflect the impact of the COVID pandemic. We had a strong performance in Macau over the Chinese New Year holiday period, but COVID-related restrictions and the tightening border controls resulted in a more than 50% drop in Macau’s GGR between February and March 2022, and negatively impacted our operational and financial performance for the remainder of the first quarter.

“Disciplined cash management remains a key focus area. Total debt increased by US$1.3 billion year-over-year as we increased available cash to support our ongoing operations and development projects. We will be cautious in managing our balance sheet and liquidity profile as we manage the business in this challenging environment. »

Melco reported lower revenue across all of its Macau properties, with City of Dreams recording total operating revenue of $256.7 million, down 15.1% year-over-year, with a handful of rolling chips going from $4.13 billion to $2.45 billion. The drop in mass table games suffered a more moderate drop of 24.4% to US$552.5 million and slot management fell 25.5% to US$380.1 million.

At Studio City, total operating revenue fell from US$97.9 million in 1Q21 to US$71.1 million due to a 38.0% decline in mass tabletop games to 191, US$8 million and a 16.3% decline in the gaming machine handle to US$233.0 million. Rolling chip volume increased from US$505.0 million to US$439.3 million in 1Q22.

At Altira Macau, which has phased out VIP gaming, total operating revenue was flat at $13.9 million, although an adjusted EBITDA loss of $9.4 million was reduced from to a loss of $29.6 million in 1Q21.

As Macau properties continue to suffer, Melco’s operations in Manila and Cyprus have shown some improvement with operating revenue at City of Dreams Manila rising from US$79.5 million to US$86.9 million. US dollars and adjusted EBITDA of US$33.0 million to US$29.4 million.

These results would have been significantly better had it not been for the low success rate in the rolling token segment, where volume grew 138% to US$647.9 million. The drop in mass table games fell from US$100.0 million to US$127.3 million and slots management from US$568.9 million to US$776.7 million.

In Cyprus, operating income from Cyprus Casinos was $16.1 million, compared to “insignificant operating income in the first quarter of 2021”.

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