Melco Resorts & Entertainment Limited (MLCO) 9 Nov 212021 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Thank you for participating in the Third Quarter 2021 Earnings Conference Call of Melco Resorts & Entertainment Limited. At this time, all participants are in a listen-only mode. And after the call, we will conduct a question-and-answer session. Today's conference is being recorded. to call like to now would turn over the Mr. I of Director and of Yuen, Melco Investor Robin Relations Resorts Entertainment Limited. Please proceed.

Thank XXXX Thank our Operator. you joining for you, today third quarter earnings call. all for

Property are Lawrence Cyprus. Davis, and Manila On the Presidents Ho, Macau, call in Evan Geoffrey Winkler, our and

may harbor Before federal provision we discussion securities get made statements laws. note please forward-looking started, of under today's that contain the safe

our Our anticipated could actual from results. differ results

each of definition included In of addition, and non-GAAP comparable most A may in release. are measures we a these GAAP discuss measures. earnings measures the to reconciliation financial the

note supplementary With on that, please Ho. call slides site. our now will are Mr. turn the Finally, posted that our I over Web Investor Relations to earnings

Thank you, Robin.

versus high focus and encouraging possible. faster citizens and as an actively of believe recovery. quarter to pace as in our cited XX% our would the restrictions operation. the call. Melco With reopening, Our in progress their Once each continued towards pandemic's the the quarter, results challenges results continued Both rate that the in for on a EBITDA-positive the -- government our citywide step over a towards Macau we on of has impact progress on in Macau are levels managed important remarkable geographies. Chinese subsequent the vaccination reached level like represents and as Despite the government immunity XX%, we of restrictions second our the we handling situation. to Currently, key get travel which Mainland this Macau, thank again, border vaccination higher soon COVID-XX reflect quarter remain our of and to third employees jabbed and

proud community those inclusive vaccination have shot XX% rolled we're with goal. fully programs employee Jab vaccination be to in first Here Driven its meet to Macau, approaching of support rate at only. and incentive overall incentive our program, by employee the to the a government's efforts Get Melco, vaccination vaccinated we out

required As Macau to weekly a endorsed and the [NAT] [Ph] the prior this by we government, despite protect in are sequential Macau starting the from our broader October, industry-wide decline our employees tests, our GGR EBITDA-positive colleagues, quarter remained guests, in quarter. to undergo Macau In community. operations, levels unvaccinated in

control cost Manila EBITDA business closure of new Our whole optimistic gaming when We stricter at in our back of In were the our Philippines, a upon operations Macau to eased. recover experienced will measures once cases. periods primary measures level COVID our factor and that pre-pandemic restrictions hospitality Dreams government of performance. imposed are the City their travel remain quarantine

the were as general subsequently gaming We for capacity to August on reopened X XX -- Xeased authorities September quarantine measures. Manila with Our incrementally public the limited to City operations XX. Dreams from of days, closed

Turning drove visitation fully to the the our over casinos Cyprus, opened strong summer were during third quarter, which months.

positive As a returned we've quickly result, to EBITDA.

us provide further expect maximum business. relaxation would that will at restrictions to capacity, which of the to permit further We operate support COVID-related

our close of Phase City the of We to resort remained Melco committed there construction offices in coming schedule. X In [Ph] program. remains on [CapEx] will discontinued Studio global Japan, our pursuit Meanwhile, integrated and months. development have Macau, an in its

an reaching recently important We the have talked [indiscernible] for project. milestone

track second-half the of December, is City on In of for X in XXXX. opening of We XXXX. Dreams complete Mediterranean Europe, construction later construction expect the than Phase no to progress

of there, from regulatory ready and enthusiastically to in remain prospects. into are will With Melco's better, From over Finally, tourism through receive customers Geoff then pent-up The that, to be Macau international I are the is we we build growth destination. and to helping some an relaxed. that once turn bigger, travel Macau believe our I call long-term numbers. diversified even and policy and the optimistic to firmly we medium go restrictions perspective, demand more a

requirements for place quarter the cash Philippines, this financial implies XXXX on were approximately positive posted we covenants. rate was Investor EBITDA of hand. on and as In $XX of the And of Macau Lawrence. end we approximately provide also on luck consolidated When quarter combined a revolver $X end Manila group-wide COD approximately our end million. supplementary by To our capital approximately the million at site. have debt billion, can was operations affected our covenants. the COD reported through be you, and Melco, currently on Cyprus respectively. had Macau, this November each basis billion. Studio financial favorable lenders EBITDA X, and 'XX. positive by property affected December City, on $X.X $X.X of liquidity found third Studio of Overall more of an this of these rate gross million. in at Details of received waiver win excluding of Cyprus, of $X.X geographies, had available of By approximately $X majority cash the our across while the revolving these in million undrawn at billion $X EBITDA unfavorable end approximately Web $XXX and region, credit the all to of Manila, structure, came waiver facilities Manila, to XXXX. to facility Thank consolidated $X comply EBITDA the At quarter. win by approximately the confirmation with Macau, clarity at XXXX, extend City, reported with luck-adjusted slides our neutral that A $XX third property our negatively earning At agreed million, of adjustments and in in The in a results we We its VIP not contains billion million, and September, of Macau properties. certain of EBITDA impacted Relations approximately VIP

had X, XXXX. of through support our this we November yesterday, received of waiver consenting all of December from to unanimous As lenders

fourth million we ADSs the shares, the were our X.X approximately shares million purchased in to quarter, one we we and our confidence what approximately to quarter, compelling these in to the and believe date. shares long-term in share volatility were prospects. on valuations, $XX our be in repurchased led recently X.X for and have repurchases company, million, to million Moving third demonstrate purchased Recent

lease expense expected we'll As on net we million, you to non-operating expected some $X normally quarter. interest upcoming million Dreams items to you be $XXX expected guidance relating the do, come amortization and million give of the Total in approximately to approximately interest. million million expense be $XX to City includes Operator, $X our of and to for capitalized is to and $XX concludes approximately at expense prepared finance corporate back for to Manila, to That remarks. consolidated depreciation Q&A. $XX is $XX million, million line million, which interest $XX of is

the Please and now Greff begin session. We the Ladies ahead. go will gentlemen, Instructions] we line Certainly. have of which from from question Joe question-and-answer first [Operator JPMorgan. coming the is

"We do Good the that negatively it of picture does," initiatives, to think Mainland's view goals get impacts I would why think -- future? love is evening, set big everybody. Lawrence, players your how maybe and that? answer, your don't topic in prosperities the on higher-end if you common your impacts And on this

still out impacts the theme sense right they on right. But, don't people which the communist higher-end it last of to tiers. Congress, want key promoting, the the few major for of is same now. so grow, people day, the they and premium. Because, gap at one the the are All really, between poverty, of going the don't Party many the Joe. I especially over players years. premium at mean mass, highest Hi, prosperity reduce prosperity the earning getting common the to achievements think still common and in Well, more I I want from VIP, time, refers -- that taking is is the in our I to XXX think the years to end they middle the mean past tiers party -- and middleclass people

then income bring really them people upstream. about So, lowest taking it's the and earning

any premium structurally it in VIP be which in story Macau the have VIP a story. the think case wouldn't any but don't mass story, different on I of impaired future impact also, mass. a is So, it the a would has on impact Macau. And is business, major

and to have Great, got anything that for thank waiver some you you that, on the release, Lawrence. that consent new covenant there going buybacks is forward? Geoff, restricts

nothing is there that No, buybacks restricts forward. going

Great. Thank you both.

you. Thank

Deutsche which have the the Bank. Please line Ricardo We coming from Chinchilla ahead. go question next of is from

thanks for taking Hey, my guys, question.

need chance been Just of when us you those in concerns could cause announced, consultation you you gives And clarified your X, regulators? kinds please spend things you City further do process advantage, a that you the was this versus of of some part if have process? competitive announcement with the with the that think talk share to recent had now as have that concern? Studio invest And what to the that the on terms might consultation Phase your of peers

it's Hi, Ricardo, Lawrence.

open have comment welcome has -- in transparent a our and also were conversations questions very our the conducted how the So, think And Macau process. really fair we've government they submitted I consultation and we we to to that had. them,

far dividend. the I calls we're more And our some other And sure earning I'm season, a of so really framework you've to concerns view. little get trying just on to the this all has bit about So, supportive. issues think be same heard going were the everybody honestly,

So, front. on and we frankly, relieved. with are after I the were And I think, industry, that as an government, think conversation aligned we assured our

work to progress. continue we'll with as think I the we government So, closely

that pertains it for hearing to the of are and are the the situation? given what that visa is Macau, the you into potential -- what kind guys what [indiscernible] know you [Ph], I Great. to currently year, with think reopening it regards as And situation [practical] regards XXXX? when expecting with hard the about this later you is of to easing but

in us XX%-XX%. he Hangzhou. XX%. talking I a function hitting rate the for Well, of in it's really currently is at the Macau. about Macau vaccination in And today's is citywide Executive potentially And newspaper, is Macau Chief think around

that he ammunition XX%, these easing has at China. much of discuss feels with to more of some restrictions So he

be to going I think as [paces] XX company, next be budgeting. And with [indiscernible] think that And we're are continues that key. [Ph]. there really the China as given worst, months, part zero, COVID for will for of be as our and six COVID so, long going assume I the as a are we're we going to But zero -- path there the to to prepared is

think half have Chinese of as travel And cases provinces or affected as of well. the close has now, contact. I that right almost

to going conservative. So, we're be

the Olympics, the handover year, Community Party important Executive of Chief Kong for a Hong the to -- of very Next seek course, year the to, is Hong will Election, Kong, can Xi year anniversary to next a from President Congress China, third of where the XXth term.

next So there events happening historic are year. really

up. in so, are being all opening super And those terms conservative reasons for of

were Got about next of that's process year consultation might do given one talking it -- future. in, Do you. Thank extension? to And in the be it. squeeze anticipate that a ended to If you expect me. June we concession renewal short-term or you still the for the

might t's in is perhaps operators think ironed with I Well, we're the with working dotting the there as have love to change the the all they year year. But anyways, two. a and terms for guess, June little need process quite framework, extend a I the of they of, bit it longer, again, a or a -- with good us crossing hopefully, I law. be, But I would would closely before out. the know go next suspect, legislative to i's to the the and we council, government, to need government, details would and outcome but

Thank you much. so

Thank you.

question comes America. go from from The Bank Ng Please next ahead. of Billy

I questions. good have two evening. Thanks, also

to the process. The first also related one renewal license

you your Lawrence, need that be change that some outlook not significantly return the think lot outlook? that view. details, long-term the potential any And are change alter will sector? margin but there ask understand will look of will to to there you areas, if We want there for that do and anything the into potential Just a are

I don't think so, Billy.

have as seen we're, wiped of we long-term and month because whole think that executives, saw think I was was company go of -- But bullish Golden and the even a are mid-term And it a during certainly we out, really I all and bad a everything -- cancelled. wiped Week the even lot of to positive. We before Week, can later into David got cases. we bit out on. luck demand, was saw pent-up Golden

in And I and margins. industry, in for our it's of process, terms none points think this it, I don't when the trajectory look Macau, -- at long-term believe, when the I we of the So, effective. affect re-tendering concession nine

talk think, same is because diversification and and be VIP that to sector do the it need being it forward, is continues that, and -- on about, future, is but amenities more more going non-gaming, is more at the going focused with is non-gaming the course, more to only mass Of I area that to be the I going the investment believe way it's to is going attractions. mass impaired time

Thanks. shorter mentioned demand. And term, pent-up you just for should be there

the days to So, recently? hear would Kong, quarantine what and some wonder reopening kind What probably the And then happened XXth Hong normalization. border color requirement first after being guys of on like removed? October just do when as secondly, last potential about of provide few see you all, in be you able China you the ramp-up

how So, on Macau? what's view that your that would impact and

it's Billy, David. Hey, Hey.

-- Week, the of really before we obviously Golden quickly were that set come. the were a had people to very nice unfortunately for had scheduled we Week, and we maybe up what a So, lot high week occupancies, Golden

bit of XXth October, just were this rebound. That more a As kick we came the here a to cases the came -- we little experienced when kind of back in of unfortunately out to this a Macau. as up able the when we Lawrence said, the it's said, open fully after nice and being gut

good very So, October the for last and week was of us very strong.

numbers you saw general. for in the with think that Macau I

been bit more a has week somewhat muted. last the think I

now. seen think the one the -- we of is that say in a Visas let's the the or little seen I that dropping bit last when have the hangover from October Golden during come had that challenges haven't had so we test so we is we've last seven people still of right to the days the Week,

to which the seven to You every love day XX tested get still to see hours, test. have back go we'd it

in we've it, many of at customers probably cases. our provinces Lawrence look you have some as now had impact China Northern some of said, as Additionally, these in also of or the seen provinces, sort sort half

Northern think into now the first. prevented week these week counting districts or from XX most coming right to quarantine that of you provinces two coming I without cities doing little a ago of just room, in So, Macau, are into just from get we're bit quarantine over now have two a which probably Macau a

relative there is just to cases hangover So, of with just the quarantine somewhat other the there and a out zero-tolerance.

out quarter in as things it past. Once We along going go So, start Hopefully a it again saw in the We it I first muted us. think somewhat the month of back November normal be we've is saw seeing to these we things seen that the more of but like second clearing, come things, pretty start pattern probably bit we get in choppy here. to this as for to we'll of more quarter. us the these fast, go of is year.

border And how impact And of Macau? in that see. Kong would sorry. the terms Hong reopening, I'm I

always business and over Billy, Kong been the and XX% months. my friends has anywhere people Hong Hong haven't at of XX XX% for from gone Kong

I opened would So, if the Hong Macau, bet between and rushing to be border Kong people was Macau.

going trial Kong goes in Macau with expand once today maybe think in Hong But was Hong about in -- all bump, where means was December. I Hong Hong thing get the that trial I tolerance the assume other sure will the in right, the a is in it with that's and dying the bound they there think talking XX And follow there to seen why zero open also up news be I to and to path XX%, and are to and open once thing, and again that shot Kong might view around in the everything opening months we've jurisdictions have we assuming So, June. Hong next we're continue China restrictions to I'm will up. but that And shot with COVID, trial XX% because the opens they February where be we'll bump. Kong the full I people Kong entertained. nice opens be successful, is everything they're -- world to open travel have even out always going the think But and up, come just if and that that cases, difficult range that a a Kong these

you. Thank lot. a Thanks see. I

Stanley. line question from go Praveen Choudhary The Morgan ahead. next of comes the from Please

Thank Thanks you questions, taking two so may. much. I my if question. for have I

about first buybacks. is The one

Wanted share whole could see is XX saying to the cheap. be you're to months, pleased continue for very the industry bound. buyback considering this clearly understand next the stock, range will very if the buyback So it

there may. matter I'm some bit level or be debts use here a So, should of not the to so Or keep you to want it's doesn't especially buy long-term at it's net because rising. this getting cash, stock a rush disconnect because little it basis, cheap, any I if maybe

wanted understand And so buyback, using the to little bit share I more. a

I result patrons. question how for And can you local what's it's again, online was were outlook, Manila in is to that started, a second gaming like only business, big seems pleasing back in The it if the that QX? I disclose have wanted understand has on

couple of Thank landscape? And but currently, years, you it evolve want the see just so smaller, much. maybe so how to next and competitive does

to for guess, two Geoff, question, thanks and those Evan I right, take Praveen. All guys want the you questions?

Lawrence. thanks, Sure,

Go ahead, Evan.

of our period. And is there allowed. player continue. versus more to online there what characterize during It mortar we hybrid version existing existing you of a infrastructure. is online of That and which with system and think that's have I obviously, in, add-on would of the COVID it gaming. Philippines sort a nice engaged offline the the as sort into within So are business going to brick to obviously integrates that is the into currently

anticipate of be terms will it continue it allowed. to in think what the I going forward, we near-term, means for

We early it for for COVID given out was circumstances. a given us working hopes will potentially it are in bit with under coming mean to the little is the set an But what us of sort longer-term. that that of the opportunity special us comment will longer-term continue for of to government be on it a permission

repurchases. so We've when the that on to share always million have billion share over authorization. $XXX And of have repurchases. opportunistic X.X we it share Obviously, repurchase, $XXX So our of historically been got out of time, million comes around done we've we've about we remaining. very

We will as we But and repurchase much we'll into rush. and share selective opportunistic market. we're We'll continue when to additional be back year. judicious any quarter not consider and in be into be continue to this the how on next

much. thanks to the average cost buyback you so disclose separately? be Geoff, Would able and QX the QX for in

just similar, $XX under both Pretty areas. in

luck. good you Thank much very and

Praveen. Thanks,

next Simon you. Thank from from Please question The Goldman ahead. comes Cheung go Sachs.

have Thank second thought Japan taking what term is perhaps obviously thanks near around there future, latest that about some Japan questions. and nice I the guys ramping idea about, we can and dropped on my expansions in talked EBITDA in a going I in the Lawrence? what's the the and question. first you. or terms we turn Hi, on guidance for that still One, the property. sort your property the remember, even you then of other you of That's seen EBITDA overseas now medium generations Oklahoma have with to question IL last two having and is question over quarter, of us, relation on share

first and the don't from one, why there. I we'll Simon, go take

at we process of implemented Studio transferred For of that where City our dramatically, well. gone quarter to our cost or City, VIP the we over second reduced we business most very our Dreams has of our end payer, plans and the

transferred also more the a cost line. We get our of lot in personnel to structure

to of do get to want As of we be the down would try go go City We'll to a people it Phase on forward the to where X. to coincide we transfers, we're set there Studio opening structure here, over probably really looking our bring more basis. which with cost forward final

generate gotten to a to forward has a on ability sustained here. profit and lower our much now. over going a is mass think level We now there continues breakeven think the be very market good to Our we see recover, business recovery, as the we

two, for and question, it’s Simon, Hey, the the second and business. crisis clearly, of by of would given it, Japan end didn't and isn't COVID the us of it over affected years On three Lawrence. your out impact the probably opportunity yet work have

the still is our think at have primary the then we of next second City two, years, the of our end And then, rebuilding all, sheet. Studio open of Mediterranean focus next three year. So next course, next of Europe half balance plates Phase Dreams, I really for think two, three X, so on our we City that's And full year in the I to years. have for

you. Thank

I We like have for Yuen Please questions would to no the remarks. turn further ending go Robin ahead. moment. any Mr. at this conference to

with you look Operator. you, Thank to Thank forward next again you today. in for call speaking Bye. conference all quarter. participating our for We

ladies gentlemen, all today. for concludes you, you our and conference your call for Thank Thank participation. that

disconnect now. may You