Melco Resorts & Entertainment Limited (MLCO) 7 Nov 232023 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by in the Third Quarter 2023 Earnings Conference Call of Melco Resorts & Entertainment Limited.

[Operator Instructions] Today's conference call is being recorded.

I would now like to turn the call over to Ms. Jeanny Kim, Senior Vice President, Group Treasurer of Melco Resorts & Entertainment Limited. Thank you. ahead. go Please

and for operator, everybody, joining for Thank Third thank Quarter today our XXXX us you, you, Earnings Call.

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

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

actual could results differ Our from our anticipated results.

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

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

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

recovery casino you, was a the hours growth. this to junkets and had Third remainder continued grow Week our benefiting the this Golden solid and reaching robust Macau's XXXX, our We into performance entertainment non-gaming of in and strength during and especially amenities. to enhance world-class to October, excluding our non-gaming player XXXX close Thank Quarter and during levels. Both with gaming Jeanny. commitment summer from to reinforced with improved, from GGR invest the the saw by recovery October over months revenues strength visitation property of

Prix standards the in Our last market-leading world's only hotels. beautiful included the most of Versailles were with as the month being Macau design being by honor Morpheus have recognized hotel to one of

quarter-to-quarter. to center increase hotels the schedule volume the adjusted entertainment us The a contributed the for been ongoing and has of the and EBITDA concerts in an drove of of addition X, City Epic XX% gaming property W of residency Studio Phase and in Macau. events Tower opening Macau

to as City We expect continues in X further ramp growth up. Phase Studio

been margin earnings impacted to by conflict has of Israel. Philippines, the a Dreams, in of the and Mediterranean strong City Dreams, City In Cyprus generate profile. severely continues solid Manila with

our there. marketing working Our realigning strategy teams are on

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

Lawrence. Thanks,

XXXX A $XXX third impact Manila of Luck-adjusted property was had approximately at property positive rate group-wide of million. of third in quarter win these COD had of $XXX for earnings at rates be adjusted adjustments of EBITDA City million. EBITDA $XX for supplementary impact favorable group-wide approximately our a in COD Our could in the quarter came around on a Macau, posted the unfavorable million. while Details XXXX negative and slides Relations the Investor $X million, win on website. Studio found

of increase including September the largely increase million the in Macau approximately to in the cost, due third OpEx was across from employees properties, per day increased costs. addition $X.X full-time our in the of per in OpEx Despite marketing in to increased approximately The increased margin the quarter. slightly quarter-to-quarter. EBITDA of second W our $X.X opening million and XXXX day quarter the Macau

our to Turning balance sheet.

and deleveraging. debt around to and continue and currently million XXXX focus facilities. committed of RCF, We during quarter reducing million at $XXX us on gives our We undrawn repaid $XXX We revolving billion end which million of available repaid in the third drawn approximately $XXX $X.X have of October. debt on the another credit

free to will drive reduction. closely cash our debt will continue We further monitor flow, which

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

fourth XXXX. items normally do, guidance quarter As the nonoperating on upcoming some for we you of give we'll line

and interest million, at This $XXX expected consolidated million. concession to expense to gaming payable and Total in of interest City depreciation finance interest approximately license and fees Manila. finance around of Dreams, approximately million and is amortization $X million to includes net Macau relating expense expected approximately of million in $X gaming to approximately relating Cyprus expense to $XXX be $XXX to the liability corporate to is expected the is million, $XX lease be relation come

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

Instructions] First question of of from the George line Citi. comes Choi [Operator

questions, I of have if I a may. couple

installation worried Firstly, means going how should there for costs forward? nongaming mass we marketing a investments offerings, or VIP, player the be in including margins. concerts? will although think Should inflation to naturally, about mean GGR in we OpEx Macau favorable ship with costs, I that boost upgrading be about

of a any have about signs latest -- and recovery concerned in and in is sustainability Do revenues? of non-gaming for moderation in I the seem the That's gaming second that's all GGR reflecting The regarding about you prices And me. question share investors GGR demand trends. EBITDA Macau. be and Macau see to guys

Lawrence. the it's Thanks for George, question.

why that don't and address question, think then talk have and question, David I well. supplement on as we'll first, the about can first Geoff I second maybe the

sector On the tourism Macau. second now. one, right the good is leading in and China we're obviously, feeling And about travel

not was best since month of people Macau I And during able being reopening. Macau to to also and the being years October COVID, think that, in force. for the coming seen after travel are us have in months we X best the

November feeling we're October as well. has has started been It good. rest even not So been soft very of And off has the good. and strong

it. concerned So about we're not

so-called continue last and we our put something we can't all sure we the down head make that's months course, we that China is investor or deliver we appetite earnings. the of the decoupling, the really over And X and the risk can control. to understand -- do year Of

I think on it maybe off first I'll hand the question, Geoff. to

the first first the Lawrence. you, Thank take question. of I'll part

that came we then guidance million the the as We in the would into decisions had to when $X.X Other we to change in add So And second quarter call. the that that, next with show. cetera. quarter I million. like of looking at et about anticipate that line about for number in provided we And on thing day third cetera, Macau of happens. quarter, on in how highlight than other could the fourth more X.X Dancing the about $X.X one think OpEx, in respect reopening per that going subject year, Water entertainment, would et House the that is

a pretty solid that's think run rate. I

So House as we the I back, these in we have you is, probably have of to Dancing let's started advertise nongaming amenities little some that of out market in including the Hong add in, have, I'd look bit know there. at thing let other or more to Water only and people to, think a Kong more attractions again, we that say, assets China coming

as didn't that's So been bit before have much than House of a change that Water. we other a of Dancing

that attractions will we continue. within still guidance gave But I and have, that the will just the those So those concerts, think you. stay that number we Geoff

going to COVID to And forward, still would be permanent. that We'd years. as sure and intact a benefit change our into guidance that next there. focus the We during No drive drive to remain key they were margin that with in starting that along incremental leverage we through, to respect the year make in those show operating inherent flow. business anticipate endeavor continue XX% to operating our savings with going cash XX% savings initiatives of

of is from line Greff Joe from JPMorgan. question Next the

close and excess back of just and junket basis Does the comments then on least imply in 'XX in a business. to EBITDA was, in at going hold-adjusted about XX%, period Week Lawrence, October being that the Golden excluding to levels? October your October subsequent

let I'll Geoff. Maybe

XXXX some with had we par and guidance return at think would slots something I the or the be EBITDA. past to Yes, and to need business in parity or more see we in range provided that nonjunket mass to XXX% pre-COVID

levels Okay. Is levels where Can or that market And slightly a XXXX? your of is you how premium you to compare that question. elevated? either mass does the think then just talk about in reinvestment terms in levels, broader just

talk can that. David Maybe about

Sure.

I whether with period, little bit -- assets kind a as brought say, that been or got concessionaires think some other of the hotel online. the, going rooms -- that other new of what we've new, they've on seen that on, been more come to brought the new lot marketing say, Joe, So relative let's of be a this their we've of have now COVID has let's out out seen

Additionally, we're economy very mass now, to as we've more related comps seen right of premium it's where What there's a market-driven shift kind is in business the seeing that. basically. a much

the more it's what is I of back see in But saw XXXX. for quarter rates more kind we market now, of and bit. seen see a just And in That we reasons a it for of new don't the or mentioned. as mean we've fourth elevated coming as So of in smoothing of comes the climbed more the that out back doesn't kind a things product have that that past. than we right a of reinvestment online throughout let's mass, bit these to, again, lot the mass say, a return

Do normal game David, as it. the percentage the of as look in outside third something hold against percentage. at of was or of table Got COD then mass XX.X%. normal that's mass the sort at the that sustainable, mix you think as do you And premium between as and that mass market mass quarter hold range a

No.

we've of let's But within say haven't before, about the within bit. talked yet we're a there. kind on might game but smooth XX% right out kind to that probably that sometimes. like we're higher table little again, is But from complete think normal mass within a our be think percentage. What whole I of normal mass, I back bit XX% range range coming things seen we that, to range. normal of that we're little a mass we're

Ricardo comes from line Chinchilla Bank. question of the from Next Deutsche

bit guys environment before this lot reinvestment how of sustainable? could are clients trying comment to guys was that or are Dreams you as levels you the current of your a you a -- back going versus guys more just do little you like? product to the the promotional they Do reacting? environment? if a do if there's I City is on of, envision trying competitors how wondering And back Or going the what some mentioned, think lot you test of your and promotional

Yes.

David. it's Ricardo, So

So little going there's you're other understanding more promiscuous say of properties, and look, may being be when I I lot people and there you think trying a out going think spot on out out a there. what

we that things a and a products before we'll need that to whether is didn't bit probably promotional that's with that back I with out a driving or had room little our opportunity our levels. other of think little to lot to so other the bit product, people say, now of of reinvestment as kind to us also into the some Studio too, in that some little What demand product at product, rooms, that database as also that's a City, go have particularly of more those seen, lot aggressive, there, said, we well. of we've which time, new that over the rise aggressive. concessionaires, addition had go a is little rooms, again, deeper get opportunity try relative and in given contributed out we've fewer the approximately get pent-up our because where be XXX into we that, let's bit that's the you to reinvestment more probably to I to order But moderate, new some I or people rates So XXXX a will be of the of get to far the and to rates. Also think us bit

it. Got

how if you you our some to the expenses why -- out wondering provided City? the related I modeling? of is could are we on that how specifically City Studio Like back, much related much color for that amount just of costs Studio operating guys for great Macau You us is should adding -- was detail to of operation.

should incremental maybe full to to City. a delta series similar W expenses. the in anticipate on the of having be that the Studio the residency the in quarter concert quarter cost reduction highlight of Well, roughly do We

that largely expense. So day out per X.X washes about of at

from Next the CBRE. from John question, we line have DeCree from

think to be then and touch customer to those has of you provide up but bit and segmentation? kind able improve using the I ramp your Are new et through a about maybe color the starting the if if you on hotel this, towers wondering could yield little been mix? may work and to more reception to How to pricing, think to have the even at you cetera, opening? you back Epic Tower started W on

Lawrence. it's John,

we And time, there's knows of very we've right open. will I be going I Phase to product and And about the think we're anybody -- same meal over retail market. on. But been of renovation retail most City now kind think Studio Studio X is gradually months, a next who's major X. excited we're piece the or City tenants rolling those opened reason the more into at this the more X

in we've waiting an I quarter of So property to will first been we major opening. area or up in course, I think try But a that. sometime we're second continuing due And ramping year the probably that for relaunch X think early quarter, next that on. is Phase do

maybe think or Kevin? can more I color So David add

Sure.

think City. finally at of April, since that frankly, really a Studio with back it premium I have look, So and quite Tower us out go didn't in from up Star we that kind would, product Epic opened really allowed business mass nice to develop more VIP when the

something And and competitors is to us. and pretty we that So build some start do good as business. team that the some opportunity there job that's to premium exciting of Studio players a really into over shifting business the more from City away our of that for of bringing those putting continues

to us. what seen say, October, XX% looking up some different about really bring December. But at to XX% regards XX% to little we started or from probably occupancy to on there's system by XX%. looking we Marriott for to it's got what now players customers the the about let's back have, about we it's is, say, kind We're bit In of to a between time cash that into a try probably the rely there, of W, mix we're we've let's where September. business, the Bonvoy in casino get XX% until, we a try build the in start We're month to off during different different

also W demographic a women. to and popular skews The different much is particularly with

mass ultimately again, allow hopefully, will Epic us into think, long-term that continue that this, time, grow will expand us. that to those customers new W, to customers and attract So customers become allow us with But business, seen month City segment, to premium biggest over continue our our our to as well both for we again, month was growth. we've see a -- month within our coin-in we the for regards And to had nice our to well we October as Studio continue in fact, and pickup slots. for biggest in of as drop ever database,

and we we've And pickup. again, forward We're absorbing in forward So said, the a well. look go seen product as as December nice we beyond.

a on Maybe follow-up color. Awesome October.

'XX Curious which things after it now a or if color, expect? us post-pandemic. is behaving the XXXX any observations on gave kind And we're customer seasonality guys or of for You little Are of about you'd thoughts customers bit me. helpful. different all before be would you've made little is holiday really that's behavior that to relative helpful. the Or week that a the and way Any Halloween.

Yes.

year on and of the of bit So that, look, first days Golden this was September early let's it when October. kind into Week, rolled say, started a those because got typically, XXth of into we X little the

different we bit towards terms few where But see the starts it we got Week as was see as you into that. a end then of it again typically pretty picking little drop-off, and about in weekend. get up than Golden after next normally days of that typical a So the a you that, kind of

again, but it a so think well though played thought action November continue into nice of going not and like now. coming the that to normal, the much of month would. what's saw return in again, kind surprise, it So been we we as is, month actually through where I pretty whole What play much of

off seen very XXXX. what in which and a is, again, up we bit back similar picked have to, little to like So dropped would then it again, used it right

was our property. high City all-time think the in of drop I the an history October, Studio

And well. coin-in as

And as well. coin-in

the seeing So I completed think quite new we it. with property are and We're park about hotels. the the once excited And traction the water is and think I hoarded. whole

Congratulations on quarter. the ramp. Good

Stanley. comes from from Morgan question Choudhary Next line Praveen of the

is ongoing. recovery hear have questions. that quick to X Good Macau I

The 'XX That's House simple. Is 'XX? first Water timeline it you for or half a first of opening? Dancing give one QX, the one. is first Did

We per said are So spending X slow dropped off, in visitors points. suggesting are October And the being trend. these about bit is overnight that capita Xnd half, the available after X question got up initially. tour very are One than little someone easily data better versus package hotels be second strongly coming numbers grind might The a then day-trippers doing premium.

So your love hear to thoughts.

Japan it. you're on And next year's it again, you perspective in Obviously, is how on the Thailand question, if working it's different question Lawrence, sure your last want money what's put from going but to not I'm is, new from there? and

Praveen, sucks, last take question, take memory my the first. I'll maybe I'll the -- so

Thailand, the and Japan we've been think years. it pretty experience many, -- unpleasant looking for many I at But experience. after

it's the this money And attractive, after buybacks. is goal back That's be very or At of the going there. and we on in COVID, Thailand, do. this at continue to I reducing for at to think reestablished very stage. delevering and on main reducing the focus to end very becoming X years much #X day, to committee look be to money most I to certainly, open another is can see spending the gaming it But market the we'll out we're whatsoever see. Japan it that. But conservative, and definitely too than current of going whether Because the We'll we think resources our objective but up, what no our and debt us, returning are dividend we're they've at it. these if shareholders, be it's exciting other of not at levels, stage, #X going is does objective. probably that. analyze -- disciplined through

the off David. to question, it second I think and hand first maybe I'll on

Great.

kind Water. To through your rates with I the Dancing coming again, the the Andaz is But now started other right with, to me a that customers of we'll quarter fourth up right And the Dancing where of been the name back in ] an in House what escaping question the of there. or the through on get remount now think TV, get I some Dancing Praveen, doing guys Epic, production from some doing the remount. product of basis. Water poach maybe of just right whether in be the relaunch, go for opportunity out room with November, lot availability, inventory doing late was now of We've shows brought other So of these We're a with things House with of on just Ye that kind the we've on and looking middle for product coming towards weekly well room hotels. the regarding we hotel. we're probably of it of going with [ Galaxy seen up we're right a in and -- coming Jung or there to our ready. now of what in a first to of of to with lot Water now, XXXX. brought and new We and We're House and back as market through the new the hotels with go process open work other there's a get think the as the now, musical started to doing for theater W in

older let's may lack Five the hotels, be Star you where out of some say, there. some availability of hotels in seeing the So maybe

said, problem. as now W. gotten think, have the we've able again, occupancy hotels our seen to with backfill XX% I been not that to with I existing. So And the we've We've

of low we Epic, high into filling We and very we our had end year. expect no as occupancy to get the to that the We've to percentages. very get XXs continue trouble continue hotels maintain be to the strong,

Antonio Our from of next Ninety question comes from Luiz One. the line Gomes

to similar Macau like seems just like wanted was quarter-on-quarter my I the From barriers it to your understand previous and came to figure, relative GGR quarter. to understanding, are But basis, from just VIP average what industry growth on the City levels wanted from seems it below to pretty understand I presentation, the levels. to for GTR. GGR XXXX of the looking at of Dreams led what's a it it kind

standpoint, a going barrier the we're little from think here as through I So bit.

in bit, -- think of a fewer here world the seen strange now little where sense we're I because look, there's for business. a -- in VIP kind players we've the

a lot created that's volatility. So more

to our a much in property. have We tendency players have larger

does that more So create volatility.

us we more sometimes So if much get allow those and when that, years us a that impacts basically does that as to that would not see as from on one have quarter-to-quarter, where quite the we on bit sided junkets, had an now. ago offset we see little impact

in market out. fundamentally to But don't term, will VIP that from standpoint So time from least get you'll I I think smooth has to I junkets to where those now without continue for the I long the think at here. us change beyond going a the think see things back changed XXXX, because that's were business. think direct long we premium a VIP

Okay.

couple next to beat that averages, forward, relative of of industry the it to quarters kind kind of normalize you expectation? Is the going maybe expect that. So

at will expectation is, historical back will averages, around level. The time. which the is some to volatility remain right again, But again return X% that our it

bit it the long-term bit get higher, But lower. view, I next a be to that back a the X%. we could be, again, could over So the will quarter think

then And be seems your from everything -- perspective? Okay. your else regardless ticking in along to

as next bit the keep on today gets and where Macau we're thing this think left into think continue. growth to of juice more the are lot more transportation in, the Yes, we a well market well as it get I our a Again, more and we as to the stronger. the there's going beyond contribute and will as continues We get little recover just But stronger getting way, think just and everything I and and year in better. these we we again, -- database, things moving airlift, All get will is forward. customers to beyond.

I back more Ms. like to no closing time. remarks. to the have hand questions for Jeanny call Kim further this We would at

call with next you. participating for in look again forward We Thank Thank . to you our today. quarter. you speaking

gentlemen, and your conference Ladies you Thank for that today's does participation. call. conclude

You may lines. now your disconnect