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Melco Resorts revenue rises despite mixed Macau results

Friday, 09 February 2018 06:09
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Melco Resorts & Entertainment Limited saw its net revenue increase 17.8% in 2017 to US$5.3 billion, despite mixed results from its two key Macau properties in the three months to 31 December.

Melco’s full year results included a 67% rise in operating income to US$607.6 million, up from US$363.1 million in 2016, with Adjusted property EBITDA rising 31% to US$1.4 billion.  Those figures were aided by a strong 4Q17 result at Studio City where net revenue grew 49.9% to US$369 million thanks to a huge increase in rolling chip volume following the implementation of VIP gaming on 5 November 2016. Studio City generated Adjusted EBITDA of US$91.5 million in 4Q18 compared with Adjusted EBITDA of US$56.7 million 12 months earlier.

Mass market table games drop also increased to US$848.2 million from US$683.2 million in the fourth quarter of 2016.

By comparison, net revenue at City of Dreams fell 7.3% to US$612.6 million as a result of lower mass market table games revenues, with Adjusted EBITDA down from US$188.7 million to US$169.7 million. Rolling chip volume increased slightly from US$11.1 billion to US$11.4 billion.

The reduced performance in mass market revenue at City of Dreams was behind the recent departure of Property President Gabe Hunterton, who will be replaced by Studio City Property President David Sisk. City of Dreams Manila President Geoff Andres is set to return to Macau to take over at Studio City.

Despite the mixed results, Melco Resorts Chairman and CEO Lawrence Ho said he was pleased with the company’s progress.

“After three consecutive years of decline, Macau’s gaming revenue rebounded strongly in 2017 with approximately 20% growth compared to 2016 on a year-on-year basis,” he said.

“In 2018, we expect another year of robust growth for Macau, as the market benefits from the improving demand environment, the anticipated completion of the Hong Kong-Zhuhai-Macau Bridge, and the ongoing build-out of Cotai.

“Mass and Premium Mass gaming should remain the primary drivers of Macau’s future growth, which is consistent with our long-held vision for the evolution of the market. Our first mover advantage and our strong determination to offer the best integrated resort experience have enabled City of Dreams to remain a leader in Macau’s premium mass gaming market, despite multiple new resorts opening.

“To further solidify our leadership position in this important market segment, we have executed on an extensive upgrade to our flagship property, City of Dreams, which includes the announced launch of the Forbes 5-star NÜWA hotel, the rebranding and redevelopment of The Count:Down, and the eagerly awaited opening of Morpheus, the cornerstone of the final phase of development for City of Dreams, which is set to be a true landmark for all of Macau.”

Net revenue at City of Dreams Manila for the quarter ended December 31, 2017 was US$167.5 million, up 16.4% year-on-year, with Adjusted EBITDA rising from US$50.2 million in 4Q16 to US$53.8 million. Rolling chip volume totaled US$2.9 billion for the fourth quarter of 2017 versus US$2.1 billion in the same period in 2016, while mass market table games drop increased to US$189.2 million from US$149 million, representing growth of 27.1%.

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