Asian casino operator Melco International Development saw its revenue nearly quadruple in the first half of 2017 on the strength of Macau’s resurgence.
On Thursday, Melco informed the Hong Kong Stock Exchange that its revenue in the six months ending June 30 shot up 262% to HKD 20.1b (US $2.56b), while adjusted earnings rose 298.5% to HKD 4.7b. However, profit fell 98.4% to HKD 164.6m.
Melco said the profit slide was the result of a major one-off gain in H1 2016 from the disposal of previously held interest in an associate. There’s also the bill from Melco increasing its stake in the Melco Crown Entertainment joint venture (now known as Melco Resorts & Entertainment) from 37.9% at the end of 2016 to 51.3% this spring.
Melco began increasing its stake in Melco Crown a year ago as its former joint venture partner, Australia’s Crown Resorts, undertook a dramatic restructuring to refocus its attentions on its domestic resorts. Melco’s increased stake was perfectly timed, coming just as Macau began its return to growth after 26 months of consecutive revenue declines.
Melco divides its revenue into two segments, with the ‘Casino & Hospitality’ segment – MRE operates casinos in both Macau and the Philippines – accounting for all but a tiny fraction of the overall pie. MRE’s H1 results were reported in depth in July.
Melco’s ‘Others’ segment – MelcoLot’s lottery business, Entertainment Gaming Asia‘s electronic gaming machine participation, and property rental income – generated a mere HKD 17.4m combined. Melco assumed total ownership of Entertainment Gaming Asia in April and divested itself of its MelcoLot stake in May.
Melco is preparing to further diversify its geographical presence after its joint venture with Hard Rock International was awarded the sole casino license in the Republic of Cyprus late last year. The planned resort is expected to take three years to complete, with doors expected to open sometime in 2020, but the license allows the joint venture to open four satellite facilities in the interim.