Melco Resorts Leads the Pack

With gains of over 21%, Melco Resorts was the best-performing gaming stock in our coverage universe. 

The stock was also among the biggest gainers in the preceding week and has now extended its year-to-date gains to nearly 48%. Last week’s rise could be attributed to optimism over strong growth in the Macau market.

On Tuesday, Macau reported a 19% YoY increase in June gaming revenue, which was over twice what analysts were expecting. 

As a result, on July 1, JP Morgan Chase & Co. upgraded Melco from a “neutral” rating to an “overweight.” On July 7, Wall Street Zen upgraded the stock from a “hold” rating to a “buy” rating.

Outside Macau, another factor contributing to the surge in share price was Melco’s announcement on Monday that it will open its City of Dreams Sri Lanka resort in early August. 

Douyu Stock Rises, Still Down Year-To-Date

Douyu International Holdings was the second-largest gainer, with the stock adding 18% last week, thanks to an over 10% spike on Friday..

Despite recent gains, the stock is down over 32% for the year and approximately 62% lower than its 52-week high due to concerns over the company’s financial health.

Wynn, MGM, and Las Vegas Sands Ride Macau Wave

Wynn Resorts gained 14% last week, with the gains primarily attributable to the positive June revenue update from Macau. The stock is now up 22.6% for the year, which, although below BETZ, is well ahead of the broader market.

MGM Resorts also outperformed last week after the update from Macau, gaining more than 11%, which helped it bridge its year-to-date losses and turn positive for the year.

Also, with an 11% growth, Las Vegas Sands rounded out the top beneficiaries of the strong Macau Results.  

Bally’s Pops on Intralot Deal

Bally’s Corporation was among the major gainers last week, with the stock increasing by over 12%. 

On Tuesday, Bally’s Corporation shares rose almost 16% after Intralot S.A. announced that it would acquire the company’s International Interactive division for €2.7 billion, paid in a mix of cash and stock.

Despite the influx of cash to support mounting debt, Fitch Ratings placed Bally’s on rating watch negative, indicating Bally’s financial stability may deteriorate because it is selling a profitable unit and becoming more exposed to other risks.

Huya Continues to Sink, DraftKings Feel Big Beautiful Bill’s Effect

Huya lost a third of its market capitalization last week, continuing its dismal run from the previous two weeks. The stock was quite volatile last week, plummeting 36% on Monday, followed by a rise of over 13% on Tuesday.

Even a generous ex-dividend payout of $1.47 (part of a planned $400 million return to shareholders) could not save the stock from the Monday freefall.   

The NYSE applied “due bill” procedures for the dividend, which mandated that those who bought the stock on or before the record date of June 17 but before the payment date of July 1 were eligible for the dividend, even if the trades were settled after July 1. The procedure was implemented due to the high dividend yield compared to the stock price.

While the fat dividend is succor, considering the stock trades at under $2.50, Huya has been a long-term underperformer and trades at just about one-tenth of its all-time high. The tech crackdown in China, coupled with a structural slowdown in the world’s second-biggest economy, has taken a toll on the stock.

Moreover, Huya faces intense competition from Chinese rivals. It has also posted GAAP losses for three consecutive years, which has made the market apprehensive about the company’s future.

Sea Limited Struggles with E-Commerce Headwinds

Sea Limited was among the other prominent losers, losing 5.7% last week. 

The company is not a pure-play gaming company; while its subsidiary, Garena, is in the gaming business, it is a global tech conglomerate with a presence in e-commerce and the fintech space. 

The recent decline is attributed to concern over higher competition in the other two businesses, particularly e-commerce, where TikTok Shop is gaining ground.

Additionally, several institutions, including the Teacher Retirement System of Texas and Sumitomo Mitsui Trust, reduced their holdings, which triggered further pressure.

DraftKings Hit by New Gambling Tax Concerns 

DraftKings stock lost 3.5% last week, which is linked to the passage of President Trump’s signature tax and spending bill, dubbed the One Big Beautiful Big Act (OBBBA). 

The Act would raise taxes for the gambling industry, as it mandates a 90% deduction for losses, which could result in gamblers paying taxes even if they don’t make a profit. For context, under current regulations, all gambling losses can be deducted from income up to the total winnings.

“I’ve spoken to many clients, and they’re very concerned,” said Zachary Zimbile, an accountant with experience in gambling regulations. He added, “If you add a 10% penalty, it’s going to eat into a lot of their profit.”

Separately, last week, DraftKings announced the launch of its Responsible Gaming tool named “My Budget Builder,” which lets players set customized limits and receive easy reminders.

Genius Sports Sees Volatility Despite Index Inclusion

Genius Sports also closed in the red last week despite its inclusion in the Russell 3000 Index. Inclusion in any index means that passive funds tracking that index must necessarily buy the stock in the same percentage as the index.

While usually stocks rise on inclusion – and Genius Sports did gain on Monday (the day it was included in the index) – it subsequently pared gains amid concerns over the impact of Trump’s tax bill provisions on gambling revenues.

The 3% decline for the week showcases the recent volatility of the stock. In the past few weeks, it has posted growth followed by declines and vice versa. 

Still, Genius Sports’ stock is performing well for the year. It’s up almost 8% over the past month, primarily driven by a new NFL deal, and for the year, it has grown over 18%. 

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The decision means that Melco has been given a 20-year casino licence by the Government of Sri Lanka

Through a collaboration with John Keells Holdings, the group is seeking to elevate its integrated resort development valued at over US$1bn.

Furthermore, the integrated resort, which had previously been branded “Cinnamon Life Integrated Resort”, will be rebranded as “City of Dreams Sri Lanka”. 

Lawrence Ho, Chairman and Chief Executive Officer of Melco, commented: “We are thrilled to be part of this landmark development in Sri Lanka and to be in partnership with John Keells. We believe Sri Lanka has immense potential and this opportunity complements our existing portfolio of properties.

“Furthermore, City of Dreams Sri Lanka is expected to serve as a catalyst for stimulating tourism demand and promoting economic growth in Sri Lanka, drawing inspiration from the successful examples set by similar integrated resorts in other jurisdictions. 

“We will continue to work closely with our esteemed partners and the Sri Lankan Government to ensure the success of this venture, and we expect to make a significant and positive impact on the local community and economy.”

City of Dreams Sri Lanka will be the first integrated resort in Sri Lanka and South Asia and is seeking to ‘revolutionise’ luxury hospitality, entertainment, and leisure in the region.

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The offering consists of US $750m aggregate principal amount of 7.625 percent senior notes due 2032. 

Furthermore, Melco Resorts Finance intends to use the net proceeds from the offering to partially repay the principal amount outstanding under the revolving credit facility, pursuant to a senior facilities agreement entered into by MCO Nominee One Limited.

The New Notes are proposed to be senior obligations of Melco Resorts Finance, ranking equally with all of Melco Resorts Finance’s existing and future senior indebtedness. 

It comes after a period of growth for Melco with the firm bolstered by a thriving sector in Macau. 

Total operating revenues for the fourth quarter of 2023 were US $1.09bn, representing an increase of approximately 224 percent from US $337.1m for the comparable period in 2022. 

Commenting at the time, Lawrence Ho, the firm’s Chairman and Chief Executive Officer, commented: “Macau continues to demonstrate its extraordinary growth potential and has shown resilience despite China’s uncertain macro-economic outlook. Visitations to Macau during this month’s Chinese New Year holiday period were close to 2019 levels and the number of visitors from China exceeded 2019.

“2023 was a year of post-pandemic recovery and the debut of our new developments, including City of Dreams Mediterranean and Studio City Phase 2. 2024 is set to be another exciting year for us as we continue to develop new ideas and strategies to bring market leading leisure and entertainment offerings to our customers. 

“As part of our initiatives to ensure Melco is leading the market in all areas of our business, we are making changes to management in Macau and bolstering the leadership team. We expect these changes will strengthen us as a team to secure a stronger and more competitive future.

“City of Dreams Manila in the Philippines has continued to show solid growth with significant market share gains in mass table games and slots. City of Dreams Mediterranean in Cyprus continues to be impacted by the conflicts in the region but is starting to show some signs of recovery so far this year.”

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In addition, Lawrence Ho, Chair and CEO, noted that this momentum continued into April and May, with gross gaming revenue during the latter’s Golden Week exceeding the same period from four years ago.

With the Philippines reported as demonstrating “a solid recovery,” Melco also revealed that the group’s City of Dreams Mediterranean is set to be showcased during the coming summer.

These reflections came during Melco’s first quarter financial report, with revenue increasing 51 per cent year-on-year to $716.5m (2022: $474.9m).

This, said the casino and entertainment operator, was primarily due to an improved performance in all gaming segments thanks to a relaxation of COVID-19 related restrictions.

Operating income through the period came in at $400,000 versus a loss of $135.9m one year earlier, with adjusted EBITDA surging to $190.8m (2022: $56m).

The group’s flagship Macau-based property, City of Dreams, saw revenue increase 39.57 per cent to $358.3m (2022: $256.7m), with AEBITDA more than doubling to close at $94.9m (2022: $44.4m).

This is aligned to a better performance in the mass market table games segment and non gaming operations. 

Elsewhere in the region, Studio City saw revenue double to $142.2m (2022: $71.1m), with AEBITDA finishing Q1 at $20.6m versus a loss of $17.3m. The same factors were highlighted by Melco.

City of Dreams Manila cited a heightened performance in all gaming segments and non-gaming operations as revenue and AEBITDA increased 53.39 per cent and 84.54 per cent to $133.3m (2022: $86.9m) and $60.9m (2022: $33m).

Operations across Cyprus, where the group currently boasts a series satellite casinos and temporary casino, the latter of which will close upon completion and opening of City of Dreams Mediterranean, revenue reached $27.8m, up 72.67 per cent from $16.1m.

AEBITDA grew significantly from the $900,000 recorded one year ago to $8.7m during 2023’s Q1, which is put down to a better performance in the mass market segment.

Ho concluded: “We’ve seen strength in the Philippines with a solid recovery underway. Adjusted property EBITDA at City of Dreams Manila for the first quarter of 2023 surpassed that of the first quarter of 2019. Performance in Cyprus has also been strong with both gross gaming revenue and Adjusted Property EBITDA exceeding 2019 levels. 

“With this proven demand, we are excited to open City of Dreams Mediterranean in mid-June and showcase our expertise with the first integrated resort of its kind in the region.

“Environmental sustainability remains a key pillar of our strategy. Our latest 2022 Sustainability Report highlights our achievements to date as we work towards reaching our 2030 goals. 

“We have expanded climate related risk assessment to provide further guidance as we implement our carbon-neutral resort commitments across our properties. 

“We are also continuing our work towards achieving BREEAM certification for Studio City phase two and City of Dreams Mediterranean following construction completion.” 

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Total revenue in the former of those reporting timeframes dropped 30 per cent to $337.1m (2021: $480.6m), with each of the City of Dreams and Altira Macau tracking decreases of 43.13 per cent and 32.33 per cent to $139.2m (2021: $244.8m) and $9m (2021: $13.3m), respectively.

This, the casino operator said, was primarily attributable to the heightened travel restrictions in Macau and mainland China related to COVID-19, which led to softer performance in the rolling chip and mass market table games segments. 

However, recent developments, which sees travellers arriving from Mainland China, Hong Kong and Taiwan no longer required to present negative tests, have been praised. In addition, from February 27, 2023, masks are no longer required in outdoor places.

However, despite a significant uptick in Macau’s gross gaming revenue being tracked from MOP 3.5bn in December 2022 to MOP 11.6bn in January 2023, a warning was issued by the group.

Despite quarantine-free travel within Greater China resuming, the pace of recovery remains uncertain and disruptions caused by the outbreak continue to have a material adverse impact on Melco’s operations, financial position and future prospects into the first quarter of the current year.

“We pledge our full support to the sustainable and diversified development of the tourism and leisure industry in Macau”

Lawrence Ho, Chair and Chief Executive Officer, explained: “Our results for the fourth quarter of 2022 continued to be impacted by the travel restrictions imposed across mainland China and Macau. 

“However, we are encouraged by the increased visitation and volume that we have seen since the travel restrictions between mainland China and Macau were relaxed on January 8, 2023. 

“Our recent performance reinforces our belief in the return of pent-up demand and our view that Macau will continue to develop as a leading international destination for entertainment and leisure. 

“We are honoured to have been awarded a gaming concession to continue to operate in Macau for the next 10 years. We greatly appreciate the consideration given to our proposal and our investment two propositions that we believe will continue to build on our existing strengths in entertainment and non-gaming attractions. 

“We pledge our full support to the sustainable and diversified development of the tourism and leisure industry in Macau, and will continue to work with the Macau government, the community, and stakeholders to contribute to the city’s development as a leading global tourism destination.”

Elsewhere on the revenue front, City of Dreams Manilla saw revenue increase 13.46 per cent to $95.2m (2021: $83.9m), while Cyprus casinos closed at $28.7m, up 28.12 per cent from $22.4m year-on-year.

On a full-year basis, revenue dropped 48.8 per cent to $1.35bn (2021: 2.01bn), driven by the array of aforementioned struggles that were encountered through Q4.

“…we are encouraged by the increased visitation and volume that we have seen since the travel restrictions between mainland China and Macau were relaxed”

“Gaming volumes in the Philippines have reached close to pre-pandemic levels, and volumes in Cyprus have exceeded those we had seen pre-pandemic,” Ho noted.

“We are optimistic about continued growth in the Philippines and Cyprus as international travel normalises.”

Operating loss through Q4 swelled to $199.5m (2021: $104.4m), with this trend following suit on an FY basis after tracking $743.1m (2021: $577.5m). Net loss followed suit after closing at $159.9m (2021: $251.9m) and $930.5m (2021: $811.8m), respectively.

Adjusted EBITDA also recorded significant struggles through each time frame, with Q4 seeing a loss of $6.8m recorded contrasted to $94m YoY, while for 2021 as a whole this came in at $600,000 (2021: $235.1m).

To conclude, Ho offered an update on the group’s current expansion projects: “In respect to our development projects, we expect Studio City phase two to open in the second quarter of 2023. 

“The first stage of opening is expected to include one of our hotel towers and the indoor water park, which is expected to be the largest of its kind in Asia. 

“The second phase of opening is expected to be in the third quarter. In Cyprus, we have been informed that the Council of Ministers has approved an extension of the deadline to open City of Dreams Mediterranean under the terms of our gaming licence to June 30, 2023, and we continue to work with our contractors with a target to open within that time frame.”

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17

The Entain Group is to pay a £17m regulatory settlement, the largest UK Gambling Commission enforcement outcome to date, after an investigation discovered a range of social responsibility and anti-money laundering failures across its online and land-based businesses.

Furthermore, additional licence conditions will also be added in a bid to ensure an improvement plan is overseen, with a third-party audit review regarding compliance with the licence conditions and codes of practice to take place within 12 months.

A total of £14m is due to digital failings at LC International, which runs 13 websites including Ladbrokes, Coral and Foxy Bingo, with a divestment of £544,048.03 made as well as a payment of 13,455,952 in lieu of a financial penalty

The remaining figure was issued to the Ladbrokes Betting & Gaming operation that is responsible for 2,746 gambling premises across Britain, with LBG to voluntarily divest itself of £212,849.86 and pay £2,787,150.14 in lieu of a financial penalty.

888

Itai Pazner, Chief Executive Officer of 888, elaborated on the “huge progress” being evidenced across the African continent, after the company outlined an aim of sticking to a three pillar framework to deliver “long-term sustainable growth”.

This came after what was lauded as an “incredible period for the business” that was buoyed by the closure of the group’s William Hill transaction in addition to an array of new market entities. 

This has been “the most significant transformation in the 21 years that I have been in 888,” noted Pazner, with Ontario, Virginia, and four African regulated markets pinpointed as key developments.

As a result launches will be made across Tanzania, Zambia, Kenya and Mozambique under the 888bet brand, which came to fruition following the 888Africa joint venture being established in March.

644

Rank revised its ambitions of becoming a £1bn international gaming business by next year, a goal it now states is “unachievable” after encountering a “challenging year” for UK businesses.

The company updated that following the publication of the UK’s much anticipated white paper, a “better understanding of our future trajectory” will be known and medium to long-term aims will be restated.

Despite tracking revenue increases across all core divisions to record a group-wide 98 per cent uptick to £644m (2021: £325.3m) for the year ending June 30, 2022, it is noted that the time frame was distorted by significant periods of closure, curfews and regional restrictions.

In comparison to the last 12 month period that was unaffected by such measures, that being the year ending December 31, 2019, revenue was down ten per cent.

The firm also cited concerns at inflationary pressures impacting its retail venues, with energy prices through FY 2023 expected to come in at £46m. With exposure to market volatility beyond September, Rank is to implement a number of mitigation initiatives, such as energy efficiency programmes.

54

EBET detailed a 54 per cent reduction in its total number of employees and contractors as part of a “corporate restructuring and profitability plan” in a bid to enhance igaming and esports profitability.

Among the other “significant measures” undertaken in bid to become EBITDA positive through the current month include reducing the funding of non-revenue making esports products, and realigning resources to enhance its igaming focus.

Alongside these moves, which also include an overall reduction in operating costs, include hopes of fresh market entries, brand overhaul and new introduction.

In addition to expanding into Brazil, EBET is expecting to gain Dutch and Ontario licences between October and December, and undertake a “major upgrade” for the Karamba online casino and sports betting brand. An affiliate program, titled affiliates.com, will also be introduced. 

140

Super Group is working on “a number of geographic opportunities” to deliver future growth, with the company on-track to finalise its Digital Gaming Corporation purchase by the end of the year.

The comments came in a second quarter earnings call, which saw Neal Menashe, Super Group Chief Executive Officer, assert that the firm is “uniquely positioned to take full advantage” of a global online betting and gaming market that it expects to exceed $140bn by 2025.

“One, I believe that our year-on-year results do not properly reflect our treatment over the last 12 months,” he said of the group’s performance.

“Our continued progress across the globe is better reflected by growing global tabs on loan growth in active customer numbers. 

“Two, ongoing regulatory change post-COVID normalisation will ultimately benefit Super Group because we have an efficient cost structure and only – over 20 years track record of trading profitably through thick and thin. Importantly, our control over marketing, our products, and our operating costs gives us a number of levers to optimise them.”

6.7

New Jersey’s online gambling space tracked a 6.7 per cent overall growth rate through July to close with revenue of $480.69m (2021: $540.55m), despite a further 18.1 per cent fall being evidenced across the Garden State’s sports betting ecosystem.

This sees the New Jersey Division of Gaming Enforcement report that total revenue across casinos, racetracks, and their partners through the year-to-date close at $2.91bn, up 13.7 per cent from $2.56n.

The region’s online casinos and poker rooms climbed 15.2 per cent from $118.68m to $136.7m year-on-year, with the Borgata leading the way once more courtesy of a 17.9 per cent increase to $42.98m (2021: $36.46m).

48

Melco Resorts & Entertainment voiced concern at continued uncertainty through the remainder of the year, after a second quarter that was “heavily impacted by the COVID-19 pandemic” brought a series of declines.

With the imposition of restrictions across mainland China and Macau bringing much disruption, it is expected that precariousness surrounding future outbreaks and operational measures will continue to have a material effect on operations, finances and future prospects into Q3.

However, in contrast to the challenges faced in Macau, the operator’s businesses in the Philippines and Cyprus are reported as improving “with volumes gradually recovering toward pre-COVID levels”.

Revenue through the second quarter dropped 48 per cent year-on-year to US$296.1m (2021: 566.4m), which is attributed to heightened Asian border restrictions that led to softer performance in the rolling chip and mass market table games segments.

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With the imposition of restrictions across mainland China and Macau bringing much disruption, it is expected that precariousness surrounding future outbreaks and operational measures will continue to have a material effect on operations, finances, and future prospects into Q3.

However, in contrast to the challenges faced in Macau, the operator’s businesses in the Philippines and Cyprus are reported as improving “with volumes gradually recovering toward pre-COVID levels”.

Revenue through the second quarter dropped 48 per cent year-on-year to US$296.1m (2021: 566.4m), which is attributed to heightened Asian border restrictions that led to softer performance in the rolling chip and mass market table games segments.

On a property by property basis, City of Dreams plummeted to $97.3m (2021: $347.6m) as adjusted EBITDA switched from $79.5m to a loss of $28.5m through the second quarter, driven by a softer performance in all gaming segments and non-gaming operations. 

Altira Macau saw revenue and AEBITDA track declines to $7.2m (2021: $18.3m) and $11.3m (2021: 17.3m), respectively, as similarly disappointing gaming and non-gaming performances fair similarly disappointingly with results of $35.9m (2021: $104.5m) and -$31.1m (2021: -$1.2m) across each reported unit.

However, this trend was bucked at City of Dreams Manilla, where revenue more than doubled to $11.7m (2021: $52.7m) with AEBITDA falling shy of quadrupling at $49m (2021: $13.3m).

This, Melco noted, was primarily a result of the relaxation of COVID-19 related restrictions in Manila, with the casino having been closed for all of April 2021 due to government mandated restrictions.

Elsewhere, Cyprus Casinos also reported significant rises in revenue and AEBITDA to $21.7m (2021: $10m) and $5.6m (2021: $800,000), respectively, due to relaxed measures that brought a one and a half month temporary closure in April 2021.  

“In contrast to the challenges we have been facing in Macau, our businesses in the Philippines and Cyprus have been improving with volumes gradually recovering toward pre-COVID levels,” commented Lawrence Ho, Melco Chairman and Chief Executive Officer. 

“City of Dreams Manila has been operating at 100 per cent capacity since March 1, 2022 and saw a fairly quick recovery in domestic business. 

“International visitation continues to ramp up, and we expect to see further growth as more of the travel restrictions around Asia are lifted and travel returns to normal. Cyprus also saw a pick-up in volumes and profitability with a relaxation in COVID-19 related restrictions.” 

The second quarter also saw Melco’s operating loss swell from 2021’s $128.1m to $209.2m), with net loss following suit to close at $251.5m (2021: $185.7m) and adjusted EBITDA loss closing Q2 at $13.8m from a profit of $79.1m one year earlier.

To close, Ho addressed the group’s ongoing developments: “The construction of Studio City phase two is progressing well. We will be monitoring the markets closely to determine the appropriate time to open and currently anticipate phasing the opening beginning in the second quarter of 2023. 

“In Cyprus, the City of Dreams Mediterranean project has experienced delays due to some difficulties that we have encountered with our contractors. 

“At this point in time, we expect to open in early second quarter 2023, subject to regulatory approvals. However, this remains a fluid situation and we continue to look at ways to expedite the progress.”

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In Macau, construction of Studio City phase two is said to be progressing with aims for completion set for December 27, 2022, however, contractor struggles regarding the City of Dreams Mediterranean in Cyprus could cause unwelcome delays for the group.

Despite acknowledging “we remain committed to our development plans in Macau and Cyprus,” Lawrence Ho, Chair and CEO of Melco, elaborated on the issue being encountered.

“In Cyprus, construction of City of Dreams Mediterranean continues with a target to open by year-end,” he commented.

“However, we are encountering difficulties with our contractor who has struggled with meeting its labour resourcing plans and maintaining progress, which has led to delays. 

“We are actively dealing with these difficulties as we remain fully committed towards delivering Europe’s first integrated resort in Cyprus.”

These comments come as the company reports its performance through Q1, during which operating revenue dropped eight per cent to $474.9m (2021: 518.9m).

This, said Melco, is primarily attributable to heightened border restrictions in Macau related to COVID-19 which led to softer performance in the mass market table games segment.

Revenue at the firm’s City of Dreams reported a decrease to $256.7m (2020: $302.5m), Altira Macau narrowly fell to $13.9m (2020: $14.3 m), and Studio City declined to $71.1 m (2021: $97.9m),with the City of Dreams Manila bucking the trend to close at $86.9m (2020: $79.5m)

Furthermore, for the quarter ending March 31, 2022, total operating revenue at the group’s Cyprus Casinos closed at $16.1m, compared to what Melco states are “insignificant operating revenues in the first quarter of 2021”.

Net loss during the time frame swelled to $183.3m (2021: $232.9m), with adjusted property EBITDA increasing 46.25 per cent to $56 (2021: $30.1m).

“Our results for the first quarter of 2022 continue to reflect the impact of the COVID pandemic,” Melco added on the company’s performance through the quarter. 

“We saw a solid performance in Macau through the Chinese new year holiday period, but COVID-related restrictions and tighter border controls led to Macau GGR falling more than 50 per cent from February to March 2022, and negatively impacted our operating and financial performance for the remainder of the first quarter. 

“Disciplined liquidity management remains a key area of focus. Total debt increased by US$1.3bn year-on-year as we increased available liquidity to support our operations and ongoing development projects. 

“We will be prudent in managing our balance sheet and liquidity profile as we manage the business through this challenging environment.”

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The parent company of casino gaming and entertainment resort developer and owner Melco Resorts and Entertainment has made the comments upon publication of its 2021 year-end performance, with updates also offered on an array of ongoing developments.

For the past year, Melco International reported revenue of HK$15.64m ($1.99bn), which represents an increase of 16.5 per cent year-on-year from HK$13.42m ($1.71bn).

This, says Melco, is primarily due to an improved performance in its casino and hospitality operations as a result of an increase in inbound tourism numbers in Macau.

Loss for the year closed at HK$7.94bn ($1.01bn) through 2021 from HK$12.38bn ($1.58bn) YoY, with adjusted EBITDA closing the year at HK$1.54bn ($196.56m) as opposed to the loss of HK1.2bn ($153.16m) documented one year earlier.

Lawrence Ho, Chair and Chief Executive Officer of Melco International, noted: “As many parts of the world have started to move beyond the pandemic situation and live with the new normal, we witnessed higher EBITDA across each of our geographies in the fourth quarter of 2021. We are confident that our customers will return in numbers once restrictions are eased.”

In what Melco describes as “the world’s most attractive integrated resort market” of Macau, the phase two development of its City of Dreams and the Studio City facilities are set for completion by the close of this year.

This will feature two new hotels, including W Macau – Studio City with a total of 900 rooms; an indoor and outdoor water park; a six-screen Cineplex complete with two regular screens and four VIP suites; and MICE space. 

Furthermore, the coming months will also see the group continuing the strategic repositioning of Altira Macau in a bid to better target the premium mass segment.

In the Greater Bay Area, the majority of Melco’s Zhongshan development project is due to be completed by 2025, with the construction of City of Dreams Mediterranean in Cyprus is said to be progressing, with a launch date expected to fall in the second half of the current year.

“Looking ahead, with our upgraded properties and upcoming new projects, we look forward to bringing new experiences to our guests and further strengthening our pioneering and innovative role in providing premium travel, leisure and entertainment,” Ho added. 

“Once travel restrictions are relaxed both locally and abroad, we will be fully prepared to address the pent-up demand of our many loyal customers.”

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COVID-related travel restrictions continued to impact operating and financial performances through 2021’s Q4, reports Lawrence Ho, Chair and Chief Executive Officer of Melco.

“We have maintained strong cost discipline under these challenging times and are pleased to see improving EBITDA profitability across each of our geographies this quarter,” he commented. 

“We are confident that our customers will return in numbers once restrictions are eased.”

Total operating revenue during the quarter came in at $480.6m, which represents a nine per cent year-on-year drop from $528m, that Melco primarily attributes to a softer performance in the rolling chip segment.

Revenue at the firm’s City of Dreams came in at $244.8m (2020: $321.2m), Altira Macau dropped to $13.3m (2020: 28m), Studio City remained consistent at $88.2m, and City of Dreams Manila increased to close at $83.9m (2020: $63.8m)

Furthermore, for the quarter ending September 30, 2021, total operating revenue at the group’s Cyprus Casinos surged to $22.4m, a 173.1 per cent increase from $8.2m.

Operating loss for the fourth quarter narrowed to $104.4m (2020: $144.8m), with adjusted EBITDA up to $94m (2020: $53.4m), and net loss dropping from $199.7m to $159.9m.

For the full year, revenue secured a 16.1 per cent uptick to $2.01bn from £1.73bn, driven by improved performances in the mass market table games and gaming machine divisions as well as higher non-gaming revenues, which were partially offset by a softer performance in the rolling chip segment.

Operating loss fell to $577.5m (2020: $940.6m), adjusted EBITDA swung to $235.1m from a loss of $104.3m one year earlier, with net loss down to $811.8m (2020: $1.26bn). 

Despite the ongoing struggles, Ho elaborated on the group’s ongoing development efforts: “Our investment commitment remains unwavering. 

“In Macau, Studio City announced fresh rounds of debt and equity financing in February, and we continue our efforts to complete the construction of Studio City phase two by the deadline set in the land concession of December 27, 2022. 

“Furthermore, in December 2021, we announced our partnership with Marriott International to run one of our new hotel towers under the W Hotel brand. 

“W Macau – Studio City will have 557 keys, 1,110 square meters of MICE space, renowned lobby lounges, a spa, a fitness center and an indoor swimming pool. 

“In Europe, the City of Dreams Mediterranean integrated resort project is on track for completion in the second half of 2022.”

Furthermore, an outlook for the current year sees Melco report that COVID-19 outbreaks continued to have a material effect on its operations, financial position, and future prospects into the first quarter of 2022.

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