Gaming operator Melco Resorts and Entertainment has announced that its operating revenues for the third quarter of 2022 declined by 45.8 per cent year-on-year to US$241.8 million (MOP 1.95 billion), a result “primarily attributable to the government mandated temporary closure of our casinos in Macau in July and heightened travel restrictions in Macau and mainland China related to COVID-19”, the company said in a statement.
Melco’s net loss for the period between July and September 2022 widened to US$243.8 million (MOP 1.97 billion) up from US$233.2 million (MOP 1.88 billion) in the third quarter of 2021.
Macau’s COVID-19 related restrictions “led to softer performance in the rolling chip and mass market table games segments,” the company added.
The SAR’s casinos endured a 12-day closure in July as the city was undergoing a partial lockdown that followed a local community outbreak which surfaced in mid-June.
“Our results for the third quarter of 2022 were impacted by the casino closures in July and the travel restrictions imposed across mainland China and Macau. In July, the Macau government implemented preventative measures against the pandemic and our casinos were closed for 12 days,” noted Melco’s chairman and CEO Lawrence Ho as quoted in the same statement.
Cautious optimism
The business environment since August has improved but remains constrained by the obstacles still in the way in terms of mobility. “Following the re-opening, the operating environment remained challenging given the continuing tight travel restrictions.” However, Melco’s top executive feels encouraged by the reopening to international tourists from a group of designated countries, who still need to undergo a mandatory “7+3” days of quarantine and self-health management.
The National Day Golden Week also showed positive signs and Lawrence Ho is “also cautiously optimistic that the granting of e-visas and group visas, which commenced on November 1, 2022, will lead to a gradual increase in visitation.”
Melco’s flagship property in Macau, City of Dreams, saw a plunge of its operating revenues from US$252 million in the third quarter of 2021 to US$66.4 million in the three-month period that ended in September 2022.
At Altira Macau, total operating revenues were US$2.4 million, compared to US$10.2 million in the third quarter of 2021, while Studio City recorded US$25.6 million in operating revenues, down from US$81.8 million a year ago.
The Mocha slot machine parlours and other sources of revenue saw a milder quarterly decline this year, from US$22.2 million in the third quarter of 2021 to US$18.8 million.
Regarding the gaming concession tender, Lawrence indicates that the whole process has been “smooth and transparent.”
Mr Ho stresses: “We fully support the Macau government’s initiatives to further develop Macau as Asia’s premier destination for international tourism. Our integrated resorts offer a wide range of unique non-gaming amenities, and we plan to leverage our experience to provide additional tourist attractions in Macau.”
Melco currently holds a sub concession and is seeking to win one of the six gaming concessions to be awarded in the public tender process, which has entered a decisive stage as the new concessions are expected to begin operating on January 1, 2023.
With regards to future projects in Macau, Lawrence Ho reiterated that Studio City Phase 2 is set to open ” in stages beginning in the second quarter of 2023.” Construction works are progress on schedule.”
Manila rebounding
While the group’s Macau properties had a gloomy quarter, City of Dreams Manila saw its operating revenues double to US$102.6 million, compared to US$52.5 million in the third quarter of 2021.
“In the Philippines, gaming volumes continue to track towards pre-pandemic levels. We expect to see further growth as travel restrictions around Asia continue to be lifted and travel returns to more normal levels,” Mr Ho said.
Melco’s Cyprus casinos are improving their performance. The group holds a temporary license to operate their first casino and four satellite casinos in the Mediterranean nation, where operating revenues increased by almost 25 per cent to US$24.8 million, while adjusted EBITDA jumped to US$6.7 million up from US$3.6 million.
Lawrence Ho notes that “gaming volumes in Cyprus exceeded pre-pandemic levels driven by further easing of COVID-19 related restrictions in the third quarter.”
