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

Although the loss was narrowed from the US$232.9 million loss reported in the first quarter of 2021 due to lower expenses, group-wide revenue for the period declined 8% year-on-year to US$474.9 million due to ongoing COVID-19 restrictions impacting its Macau operations. This was also 65% lower than the US$1.36 billion in revenues recorded in 1Q19.

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

Addressing the results, Ho said they “continue to reflect the impact of the COVID pandemic. 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% 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$1.3 billion 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.”

Melco did point out, however, that liquidity is not currently strained with cash on hand of US$1.9 billion and US$3.3 billion of total liquidity, including its revolving credit facilities.

Melco saw declining revenues at all of its Macau properties, with City of Dreams recording total operating revenues of US$256.7 million, down 15.1% year-on-year, with rolling chip handle falling from US$4.13 billion to US$2.45 billion. Mass table games drop suffered a 24.4% decline to US$552.5 million and gaming machine handle a 25.5% fall to US$380.1 million.

At Studio City, total operating revenues fell from US$97.9 million in 1Q21 to US$71.1 million on a 38.0% decline in mass table games drop to US$191.8 million and 16.3% decline in gaming machine handle to US$233.0 million. Rolling chip volume fell from US$505.0 million to US$439.3 million in 1Q22.

At Altira Macau, which has phased out VIP play, total operating revenues remained flat at US$13.9 million, although an Adjusted EBITDA loss of US$9.4 million was narrowed from a US$29.6 million loss in 1Q21.

While Macau properties continue to suffer, Melco’s Manila and Cyprus operations showed some improvement with operating revenues at City of Dreams Manila up from US$79.5 million to US$86.9 million and Adjusted EBITDA from US$29.4 million to US$33.0 million.

Those results would have been considerably better if not for a low win rate in the rolling chip segment, where volume grew by 138% to US$647.9 million. Mass table games drop grew from US$100.0 million to US$127.3 million and gaming machine handle from US$568.9 million to US$776.7 million.

In Cyprus, operating revenues at Cyprus Casinos was US$16.1 million compared with “insignificant operating revenues in the first quarter of 2021.”