Melco Resorts & Entertainment Limited (MLCO) 1 Aug 232023 Q2 Earnings call transcript

Ladies and gentlemen, thank you for participating in the Second Quarter 2023 Earnings Conference Call of Melco Resorts & Entertainment Limited. At this time, all participants are in listen-only mode. After the call, we will conduct a question and session. Today's conference is being recorded.

I’d now like to turn the call over to Ms. President, of Vice Entertainment Resorts Senior Limited. Kim, Group Melco Treasurer & Jeanny

and for you, for you, thank Thank operator everybody, quarter earnings our XXXX joining call. second today us

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

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

results Our from differ results. could actual anticipated our

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

slides Finally, posted please note that our our supplementary website. earnings Relations are Investor on

I'll now that, Lawrence to Mr. Ho. With it turn over

Thank Jeanny. you,

With increased VIP segment XX% to in XXXX, during the evident direct compared as GGR month-to-month our quarter. our first premium exceed to quarter in the recovery, quarter. Mass of second and increase the strength turnover drop the in levels XXXX in Macau continue in the second

daily July, supply Mass in issues drop Labor resolved. into have its expanded in reopening. July further levels. Macau surpassing been property point Macau’s reached largely reservation highest since And XXXX

been able suite with Melco’s provide services and We have amenities. our of to customers full

to hotel with opening Studio portfolio customers of the XXX to our the positioned at and add City the W expect Macau are September increase continuing another of in well rooms support We to in Macau.

our we for in XXXX. Cyprus, we Philippines, soft outperform XXXX public successful and prospects to In continuing levels June, the July City segment mass there. up the Mediterranean after second the also a we’re is quarter the in The excited ramp as in of opening to of operations recovery leading in its Dreams opened

of over the to to turn go through I the some Geoff that, call numbers. With

Lawrence. you, Thank

COD XXXX our for XXXX in group-wide for the had EBITDA negative adjusted Manila impact by rate was unfavorable a property Luck-adjusted $XX to a at first the City while approximately million property in in Macau, of of group-wide XX% had of came second the rates around favorable results quarter win a Our million, a XXXX. increase compared million, impact win approximately Studio at $X of on positive million. $XXX quarter second $XXX and EBITDA quarter COD

increased OpEx series around the second per of in was If quarter. at around largely This City. $X $X.X quarter day from XXXX, would per to million per cost, the $X.X day million million OpEx Studio to the first cost running the this exclude have due Macau concerts residency around day. in been we were increase of day per to

his been in issues resolved. largely remarks, supply As labor have Lawrence mentioned,

call, During fewer would Studio move to we estimated our quarter City including is This into savings compared we as increased expected cost continued X. to operating translate first results leverage unchanged. and we Outlook that have full-time This X,XXX Phase remains forward. XXXX, approximately employees,

quarter the Depreciation Studio and of and due XXXX opening of the depreciation to City second in City X Dreams amortization Mediterranean. the with of additional increased associated Phase

after during of the the Phase, X was Mediterranean. COD Studio in to interest and City, completed expense interest capitalized lower construction Similarly, increase related we quarter

liquidity. Turning and to our cash

$X.X Studio for around $XXX approximately Of government. cash Melco, operations was had Philippines to its billion excluding City, as million we on XXXX, XX, collateral restricted, at million. Macau guarantees this, of accounted June Cyprus, of As $XXX around and required the issued consolidated for the hand. concession-related

the second and million. decreased net remains quarter balance by $XXX of the XXXX approximately debt debt first total stable Our from to quarter

on continue flow expands. with to will operational excess the generated We place deleveraging our as cash cash priority

interest expense expected to million, liability $XXX approximately $XXX finance guidance lease approximately be in million City interest and line will and finance million you relating license give is depreciation we around relating relation gaming of to net of $XX to $XX interest million, at this approximately to amortization $XXX come items and includes $X concession Macau is fees expected upcoming to As Total Cyprus the for some Dreams, we Manila corporate expense do, expected on of gaming $X quarter the million of is to consolidated payable third normally to non-operating to XXXX. million, expense in be million

That to prepared you remarks. concludes for Operator, the our back Q&A.

Our from first your [Operator Instructions] Choi the question George. line Please George of Citi. question, ask comes from

taking I if a my Thank couple you for questions. have may. I

And Firstly, the guys being a about may permanent. percentage any would points you accounting by the guidance? you usual. that the to - an said, Was become expect than XX% last you much. very during higher OpEx you earnings Are one. in ensue? still COVID that how if just a on call, standing of your figure? many years I And so, improvement in Thank see one-timer little my is, question second you expense that capital there reduced

do those? to Hey Geoff, you both want of take

Sure.

our COVID, we that guidance our savings. to into permanent be recall the was savings on cost during I will Believe So, call XX% of that first translated quarter XX%

We translates margin still are into of conservatively XXX points that basis with That approximately comfortable guidance. improvement.

then think a in for to second cost, that third as covers expense, I the your do George. corporate, the quarter question some legal to one-off aviation approximately as million. quarter $XX well we related well. the first increase anticipate on that in was And The question as second down coming

much. Understood. Thank you very

you, Thank George. right. All

from CBRE question comes John. DeCree John go Securities. of ahead, Please next the Our from line

you hear can me? you can Hi, guys

Yes. The is line clear.

John. Yes,

Great. Great.

my Sorry and the maybe Geoff, City about about Dreams hold I if of could talk that. Thanks City. unfavorable for you Studio wonder question. taking

yet. hold, all there. VIP as and call in So well? a go I remarks, market mass about $XX the in XQ go trends headwind I if the prepared curious financials think, million just your a the yet had quite seeing all in number correctly that Haven’t to impact. to Was you're the through chance

Yeah. Thank you for that question.

strictly adjustment hold our VIP. of All is on

adjustments So, mass. for made we any haven't

well concert am entertainment series it. a if Geoff. maybe of on or give is like on could how think terms looks the in doing at a what and attracting visitation then, I us curious, about driving Lawrence additional Geoff going concert color Got in a follow-up of there's you customers, And little discussion been bit bit forward? that residency Thanks customers COD, series the maybe you of entertainment more

Yeah. it’s wants the just us. more with But can John, Lawrence. last Maybe has color. one that hand, it have sporting ended or checks Macau On events. We're He, provide for weekend. more been, to question. the the Kevin for it entertainment very series residency government David happy boxes all operators the the Thanks

more once internally raised in the busy seen the on-site. so, we importantly, events and key was one. firsthand that Studio it have of how those City for But have has us, particular, City and And Studio for a we property becomes awareness

Kevin and David can add maybe, color. more So,

Lawrence. Sure,

Aaron of terms number number with visitation rooms, in. that shows the in that we've this now gone up restaurants, of the between quite of look, we seen we’ve our of Joey coming online as are with sold, with we've the package we've in we’ve did our So, up the, the and weekend last seen and have Lawrence seen drawn that hotel ended a at what customers bit, lot the spending numbers now considerably but, that with covers go done Lee what said, impact the we've if a look patterns just Kwok, XX you with

us. of Lawrence the So, it's nice And for lift said, it's been level that’s been a awareness built as really now.

fourth of the third level to forward We here. will go as quarters into visitation we and continue that drive

Thanks my and quarter Great. Appreciate all questions, taking the nice colors. everyone. for

you. Thank

of comes next Stanley. from Our your question question from Praveen ask Praveen. Choudhary the Please line Morgan

you hear Hi, can me?

Yes, we can you. hear

Hey, thanks, Geoff. Lawrence. thanks, Thanks,

the September, when in W so let’s Just question fourth the will question. be first say a be open million? compared OpEx quick That's will your for quarter OpEx Geoff. $X.X What just to

The running and just than your much is, that at second mentioned mass revenue is costs you assuming the are lower. question XXXX already higher level

in aware than of XXXX making there are some we more I already should Can that July, level drivers EBITDA? of? other be that you're Or or issues are assume

watered Lawrence is, you levels are improving – the the versus as And towards any in premium has lot mass plateauing And of you. I a much side that playing month as side. are then mass. keep have of Macau, every for up for the higher? the at last understand not business of mass the premium picked thoughts these grind do as that people you question Thank But XXXX

do of questions? last first And one. you couple to then with deal the the Hey, I'll Geoff, take want

Sure.

it, So where I outlook call quarter. we third can the for on share, for an in think OpEx, that'll settle

series, reported you'll X.X I make I the X.X by the a see million quarter around say into number million would per we to think, normalizes excluding on basis, second X.X million the that concert If range. in that did for that around day. per So, same we day adjustment

you you. follow-up? Thank have Do any

yes. have On me I answering the sorry, been let – to Praveen’s question, –

fully hasn't mass mass, infrastructure mass, online. On transportation question, recovered. It coming the the the is the grind still and the,

probably look So, And started lifts if - now a a going at weak air has XX%. very Macau has very months you recovery six Macau, the right over much last the around become since into end-market. at the is

groups transportation finally the haven't of business we So weak mass the the day when going recovered infrastructure more tour fully improves, believe the probably that, are yet. out the they will infrastructure groups or fill forward, grind and starting, improves, tour but

the been recovery has far, by driven premium everybody's expectation, it's but exceeded mass. And so really

layer us growth. in, give So, I comes once think mass will the grind that incremental

XXXX is the maybe at mass we I non-gaming for better, also have there July of lower. proposal? Geoff about question side, Okay. that. Lawrence we - EBITDA? non-gaming But submitted you, correct were already was on the follow-up So that just question but it answer you higher than one one that Thanks Lawrence. more six kind being players is, their also Are cost had for all asking

has what the wants. so in And approved a forth are of working bit on? exactly exactly going we final you are And outcome? detail will little not give more and Can that government been Thank what for be you. you back and terms

Sure.

I we was investment Macau licenses last of the the December. the for first when investment proposal, original all did by the November, the government agreed think on non-gaming, proposal

approval. of first and the was can think David a more I give and And supplement that account. So detailed by probably then, May

there it but lot of on reporting. is the of we're by all approved again was reporting May, there's reporting I a operators’ right quarterly what the part. now think seeing that Monthly is

there's discussions maybe David do I you you provide guess, bit this, you that. color? more lot a and think So I of do on do negotiations a can do

Sure.

the we And to things executing there's costs what capital for obviously that on. we related our again, casino or we're done it's replace tender Praveen, of or as initial that documented in terms we're items There's the well that two there's as we're pretty going along. obviously of would normally doing certain certain do for plan. approved So, were was that we things casino the upgrade types

terms of non-gaming of kind collection kind terms can things. is of we’re in concerts, a they non-gaming in events, events, of of be one other or The can The sponsoring. sporting be capital that things things

So, we've we're the to going we're with everything said executing we've do on. government, done and

it in there's Lawrence very that whether measurement goes DICJ, significant As the said, terms along be or MGTO with quarterly or a IPIM. a measure of

Or additionally, they're saying. that XXXX. we to closely, what it’s make said along, But do basis. they're we sometimes sense not something we a on do monthly we're certain sure trying things monitoring to going where make it doing back quite everyone's in there's that But as going may were

the So we slide try try government the support government attract that the international trying to things of as do business and build the and go work a or into make things things lot visitation back the Macau. other with to more some we help in of programs to is kind MICE adjustments or to

December. I going proposal got Praveen, in the the to when us number we operator our stick for most important we're we an is, But, investment to thing that last put as the license for think

of to make but or we're terms So changes to defense that things going number. put going we might stick to in in, that we're

in It’s this. on for please, get Can you, and cost David. still answer very EBITDA Thank mass July considering the Lawrence, from Geoff? clear, I clarifying the

Yeah.

not ahead us taken confident circling from to levels to levels get into have I share are July. around at back of the I'm that so, EBITDA. we quarter third back in want results. GGR to Okay, second But the mean, of ourselves to quite don't I Praveen, of the we quarter get respect XXXX

Very And much. helpful. congratulations results. Thank you those on good very

you. Thank

Thank you.

line of from Thank your you. [Operator Goldman the Cheung Instructions] comes Sachs. Simon. Please Our next from question, Simon ask question

done relation even quite also with well you in or retail quantify on on number actually to mentioned In success us residential any be what sales I about And sold, question. Okay. Lawrence. the helpful. to quite you numbers, perhaps you would us. can visitation the a Jeff. first some share obviously, Thanks, you Studio the the on see Thanks, whether and that, can to all have number lot wanted That’s hosting everyone. That Thanks, these of City. the of to help relation done perhaps

market seeing maybe others’ We've been are example, of are COD? maybe people competitions and for lot you How driving potential in, the giving to opportunity and the, further a share visitation or the parlors property. the more hearing dispo reinvestments

So, the premium about wondering, you. as well. competitions comment whether you among can mass also the segment Thank

Hey, Simon.

So mass we We're to over started meaningful supplement. and on but the maybe premium first I'll to share about competition hand David quarter in talk the gained out I think we've some it obviously, second quarter. slow, that

month beginning quarter the the had Macau, we've had just we've best far, third the like July, And the in the so best months, entire since reopening.

premium growth, on we I over on of level. QX XXX% at are drop But XXXX mass direct think and

same and that at comfortable built. I probably the competitors, some, aggressive there with and have referral the market, and the are In team newer But terms reinvestment in that. maybe more that. our they are the of we we guess, with can But pay. who product time, talk happy about quite we've fees more the we're sales are very that ones So the especially, that structure David

Sure. Thanks, Lawrence.

on a And look City. the I residency the kind can, for called to huge after visitation, is to the concert so with with of is that even go at period happening Studio the really you number for driven, time that on through That property, concert series, what's the on we've said certainly thing on think, both shorter the up what's particularly we on as a as that obviously that one periods covers before visitation nice of as us pickup I seen series. we but

where a started The up on a we There pick built. in sold of are we’re at as City Studio XXs. high level probably is is So, right out. week running the seeing guess lot seeing that. awareness the completely We're Friday, been that also of we we’re now. sometimes Thursday, running that has large during days, This now happening occupancies

more lot are customers retail much were number outlets a we and up. sales more spending. on areas. have traffic in Further seeing that starting the of are and But terms in seeing in have how don't see We're we our gone more to more going specifics retail our seen hold of say they're lot I those our in that increase food our let's and third-party beverage of traffic huge are – - that covers here They've more a a say the quite and let’s our outlet in restaurants. happy. traffic,

well of people I as of think the kind as, The really ignited month was one park, seen nice running the water over park a July during it's of we've our at X,XXX water well. things now as day.

at level nice again, lift the really overall over terms in So, seen the in visitation, a of of spend Studio we've City.

some So, doing us. for it's good things

in since of also we're nice we've with players increase of the seeing Additionally, share April, a as as share a to month-to-month we the that in City. are here coming started Studio seeing back over in, big well, from recapture we've we also of of are some opened market as market where now we've seen X% kind gone up that

So, We get third a again, continue as - quarters. we that excuse – increase. and the as into level me just to the we second think nice of fourth will get into or build

results. half on Great. first Thanks. the lot. a Congrats Thanks

back am remarks. I to like you. I'd the Thank questions. Jeanny showing to no closing now turn further conference for

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

today's conclude does call. participating. for That you Thank you. conference Thank

now may You disconnect.