Asian casino operator Melco Resorts & Entertainment (MRE) saw its second-quarter revenue jump more than one-fifth as Macau’s VIP gamblers emerged from their hiding places.
Figures released Thursday show the Nasdaq-listed MRE’s revenue hitting just under $1.3b in the three months ending June 30, a 21% improvement from the same period last year. Operating income shot up 76% to $127.4m and net income gained 18.5% to $36.5m.
MRE chairman/CEO Lawrence Ho credited the gains to the Macau casino market’s “strong growth trajectory” and the “ongoing improvement in player sentiment,” aka mainland Chinese VIP gamblers feeling more comfortable testing their luck at Macau’s baccarat tables.
MRE’s flagship Macau property, City of Dreams, saw VIP turnover rise nearly one-quarter year-on-year to $12.2b, while mass market table drop was up 4.4% to $1.07b. Slots handle spoiled the winning streak, falling 7% to $938m, while non-gaming revenue was up nearly one-fifth to $74.6m.
MRE’s newest Macau property, Studio City, didn’t formally begin VIP operations until last November but reported VIP turnover of $4.7b. Both City of Dreams and Studio City reported VIP win rates above the expected range.
Speaking to analysts following the results, MRE’s COO David Sisk said the company had been “very surprise and very grateful” in terms of how its VIP business had ramped up and MRE’s junket operators had “performed very well” for the company.
On a less positive note, Sisk said City of Dreams had experienced a lower than normal hold in its lucrative premium mass segment that likely trimmed $20m off the property’s earnings. However, property president Gabe Hunterton said the premium mass hold rate had rebounded into the normal range since the quarter ended.
MRE expects to open City of Dreams’ new luxury hotel Morpheus by Q1 or Q2 of 2018, by which time COD will turn nine years old. Ho described Morpheus as “a massive catalyst to launch COD 2.0” and the company hopes to coax an additional “50 plus” gaming tables out of Macau officials for the new property.
In the Philippines, City of Dreams Manila enjoyed its sixth straight record-breaking quarter, as revenue rose 47% to $176m while earnings jumped 72% to $62.8m. VIP turnover nearly doubled to $3.2b, mass table drop was up 26% and slots handle improved by 47%.
Manila property president Geoffrey Andres said City of Dreams Manila had witnessed a temporary decrease in international hotel bookings following the recent tragedy at Resorts World Manila but that the effect had worn off by the end of June.