Melco Resorts & Entertainment’s earnings debut a winner

TAGs: Macau, melco resorts & entertainment

melco-resorts-entertainment-city-dreams-manilaCasino operator Melco Resorts & Entertainment (MRE) was firing on all cylinders in the first quarter of 2017, with strong results in both Macau and Manila.

Figures released Thursday show MRE (formerly known as Melco Crown Entertainment) generating revenue of $1.277b in the three months ending March 31, a 16% rise over the same period last year. Adjusted earnings were up 42% to $353.3m and profit nearly tripled to $113.4m.

The gains were down to a number of factors, including a fully ramped up Studio City, which was still finding its feet in Q1 2016 after opening in Macau the previous October, a market-wide rebound in Macau’s VIP gaming sector and another record performance by City of Dreams Manila.

The original City of Dreams in Macau remains MRE’s flagship property, although its revenue was up only a modest 2% to $693m and earnings rose 4% to $213.5m. VIP turnover rose more than one quarter, although this gain was blunted as VIP win fell half a point to 2.7%. The property’s mass table drop and gaming machine handle both suffered modest declines.

Studio City’s revenue was up nearly $100m to $278m and earnings tripled to $67.8m. Studio City wasn’t running any VIP tables this time last year, but it recorded turnover of $3.6b, while mass table drop and gaming machine handle both enjoyed double-digit growth. Ironically, the non-gaming focused property saw non-gaming revenue fall nearly 13% to $50.8m.

MRE’s other Macau property Altira Macau reported flat revenue of $109m while the Mocha Clubs slots hall business was also basically flat at $31.1m.

City of Dreams Manila’s revenue was up more than half to $157.4m, while earnings more than doubled to $61.1m, the fifth straight quarter of record earnings. VIP turnover rose $900m to $2.4b and VIP win jumped 0.6 points to 3.4%. Things were similarly bullish at the mass tables, where drop was up 28% to $154m and gaming machine handle was up over 61% to $730m.

MRE CEO Lawrence Ho was understandably pleased with the results, the first since his Melco International Development acquired majority control of the firm last December. The numbers exceeded analysts’ expectations and Ho was understandably chuffed to announce a quarterly dividend of $0.03 per share.


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