Melco Resorts & Entertainment Limited (MLCO) 13 Aug 242024 Q2 Earnings call transcript

Ladies and gentlemen, thank you for participating in the Second Quarter 2020 Earnings Conference Call of Melco Resorts & Entertainment Limited. [Operator Instructions] Today's conference 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. Please, go ahead.

Thanks, operator, and thank you all for joining us today for our second quarter 2024 earnings call.

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

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

differ results anticipated our could results. Our from actual

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

website. With posted Finally, I'll please Ho. supplementary our call our to turn that, note Relations over earnings slides the on Investor are that Mr. Lawrence

us and Thank you you, Jeanny, thank all for joining today.

initiative profitability of to XXXX. strategic drive quarter evolve growth Our continue to expand second in the and

Macau enhancements We our premium provide properties to are to in best our in investing patrons. and incorporating to the available people experience

and City solid experienced headwinds welcome remain results. continued in first built like City on quarter. the quarter grow has Kelly. are the and We're satellite than had Manila Mediterranean, him some of our GGR market we of initiatives board teams and XX% continued upon will casinos of Dreams growing in more confident Cyprus market, continue We've but have to year-over-year, position. I'd maintain just with to quarter-to-quarter. we generating seen for very solid Dreams in that the our Macau. our and us President another on month market luck-adjusted Macau. excited Our position opportunity EBITDA of momentum Dreams Tim quarter-to-quarter focused to this our our as driving lead Property COD, expansion this for He City joined take to to has

to restaurants, Lanka the go that, integrated well. Geoff Dreams of Lanka's to over City target of open the with hotel, the open I'll numbers. XXXX and partnership Keells Sri to the casino to is banquet facilities, progressing in we Our to operations turn expected XQ while call its first commence in resort through with of some Sri John is group mid-XXXX. With

Thanks, Lawrence.

$XXX quarter, Our chip of group-wide and second rates property second with to line the increased approximately Rolling million. in EBITDA was levels XXXX group-wide win was adjusted normal in actual. for therefore, luck-adjusted approximately X% EBITDA property the quarter of more

Macau made million increased day X.X% the to increase day. the X.X cost the This board OpEx approximately of in the due as million labor well residency have majority reflect we in as per quarter across a increase to this concerts. the from an increase costs, which additional per Our of Macau. in Studio City X.X The was salary excludes hires

investing April, quality our that We significantly to people with the a increase are the refinance proceeds in elevate of us we to our to extension from to been and billion down risk down issue RCF million allows used refinancing The pay the productivity. In RCF. in $XXX XXXX the our in draw service Melco to Studio we series reduced in $X again have to of to The bond $XXX the options. due bonds and flow, July free Studio are to $XXX now Studio reviewing at XXXX. we at million actively is of cash solid We have our refinance Melco. levels generating City City due our patrons City refinancing a by of credit transactions $X.X extension million billion revolving and of that facility million our bonds $XXX offer XXXX. bond tender XXXX, issuance a with the included on the provide XXXX

Our robust. is current liquidity position

the Studio around hand this accounted XX, consolidated $X we of XXXX, its operations cash for cash approximately Philippines liquidity. million and had balance. at in billion City, available June $X.X $XXX Cyprus, and Melco, excluding over of of billion As on

issued required to concession-related government. cash guarantees restricted Macau collateral for was Additionally, approximately $XXX million Macau of the the as

to Operator, of Macau the gaming expected consolidated to of XXXX. Total of lease million, approximately to to interest relation fees concludes $X to approximately our some relating come for interest be finance and prepared million. the Q&A. expense As you $XXX around is at to expected $XXX be upcoming the finance million Dreams payable approximately to gaming you line nonoperating and on $XX give normally for in million. liability million quarter includes guidance $X in of net interest the million million is concession we $XXX Cyprus and This do, to is third and Corporate Manila. That expense items amortization $XXX City we'll license approximately relating to expense remarks. depreciation expected over

Citi. questions [Operator come line Instructions] The the from from Chao ] Joe [ of

Thank recent Would I think on at to question, us gaming some much. that you any saw secondly, our guess I'll details and floor. City Lawrence. a share materially? we of Dreams' visit And criminalization it about guess construction Macau, you illegal upgrades start cash with of view works on activities? very you for this please? please GGR the please hits the Would is with I share doing the And you do with topical you're exchange your to floor, gaming the us

right. Thanks, George. All Hello.

not the been for issue, over talked about new. I a it's on changer think money It's year now.

-- it's it's us. not again, surprise a to and -- So

holiday course, issue softness in which It's and very already, and liquidity school the we to June, August start. weeks For us, this terms bit to Chinese in also has it later. good terms saw of the Euro Cup, the more is from of of July to the mid-June in players. to started impact and I lasted X growth related year, a bigger But a off think mid-July in an of

really it didn't So start until mid-July.

they like X school where home and Cup, to Chinese done stay want Euro -- before parents So holidays make kids which again, the sure travel. final with or exams every it's just whether Cup happens the World years the

an So I think money changers. that And we've Macau rather changers, regards the years. in seen softness some June than of was to in that we've impact seen with July, of the the more over this and money the

being in years IBS, story able the visit XX been terminals, to making, I decreases. people a more frequency think less UnionPay, of UnionPay this has the

it's going So think don't it's thesis the I into nothing dramatically. again, Macau to change --

if anything, the So very optimistic and we're positive about future.

is in more what August we've summer. typical I seen a far so think

into heading And year. will happy that the continue we're so half to of we second the I see believe growth. And

And subject time, exciting the at the that doing to gaming that will to And the our to of work floor maintenance the mass at at at saw, post-COVID, hopefully, you from City premium standpoint brand -- that approvals well. our work City the to there more of I think a about of that Dreams our the be I and since reinvesting directly area lot think in we're reactivating I Golden regulations. And we're VIP people, open time, well, as of some is including that reestablish Evan we've of by Dreams, done I City flagship. perhaps why admitted slot of by QX talked Week, that's again, Dreams. and were promise think Cotai what that at changes QX, nicest of the we've to need Dreams needed think MGM maintain to same I would reinvest On the that position, floor. former a about our we can have our the leadership [indiscernible]. think same stuff probably time, into City call, And done gaming in was of of talk course, faces we've reinvest entrance

for years. corner you think given something of busyness been that right entrance that really I working has is that now, So XX And don't to the add? we're open QX. want Evan, for never I again, that on know,

Studio City. specifically back on I circling Sure. guess

up, do If and been couple What you've months, there a more reset the property so has the shifted we inventory fulsome there looked porting floor in it that to fairly dramatic. we the the floor. table some putting and set had better of over continued that a doing volumes. over were floor stripping we some initially and of repairing last We've flooring, could raised carpet going was of stone lot get actually off as

the was that So of focus primary that.

or we the areas been enhanced of if and great. in in that new that there that opened There recently, stadium, the are which slot got beverage our just floor. limit stations the new happening you've works right, there's your look here be We've going opening some reopened couple little prospectively, are on -- work near-term. sorry, addition, our wall forward will to a In a some food floor, we're probably a traffic. area And we that of higher as sort the that on then the precluded as you've been you up do seen there into walk looks of

a not areas. to into tweak, think play opening giving a it's big by some And we're going better visibility up those and flow there, better we little but get so and

loyalty our it's our the enhanced surprisingly, redemption, about something Kevin areas should a front tell saw happy coming the coincidence it sort to in people thought would in, we As property, of it when and moved loyalty we you, own, but just up not when sign-ups. of was have

done it's for so database. And well our

And areas in so as right built are walk getting the on stay sort of that those the gaming out there and promotional terms areas are to service refined floor. customer you going and of having in

at primarily that's So its Studio City.

we making construction the to, they of short-term, a of felt at alluded weren't you we've that that City competitors as taking of Lawrence of as we're long-term the corner and and us sort goes traffic series now, right capture activations. away, we exists but our people. getting and sure advantage that at of disruption, those we there's As where that very enough short-term In of Dreams, couple people the between a get forward, walk got

on rail into the level then activating So entrants at up we're creating going and activations looking that light the and the short-term into also some property. doing property

QX, to addition, of and the that's an which in that's we've Macau going White to Gallery, anniversary we exhibition handover retail be the driver. call incremental a right in traffic the going the got be come of with of In by which is going is space part Nuwa, the to new coinciding

good seen some there that If weekend, in attracted weekend and the you've that we've on you've cars we've sports got already concerts crowd. have that lobby the on pretty got the been

as a near-term terms City activations sure footfall getting that into of going that the So we the on now making are said, we've number and Dreams property. in very we're got on is of continuing into of and activated that QX, want Lawrence that

the think those those amazingly strategically facing, of put think them way, they saw good it's I And at a car, few by sports MGM very I I guys and the looking. smart. which And you were

The line Bank. Chinchilla questions Ricardo from of from Deutsche the come

the environment. was start if hoping could I promotional we with

And the of there? freebies de-escalation some evolved by to any that the trends I some to with was promotional, competitors. regards was could you hear how those quarter, of your it if us in second provide color July continue We of sort any of being very about have you or some to hoping change into or seeing are and customers are in if August? offered escalation

reinvestment. Hello, our we're incredibly Ricardo, disciplined in

For player details, of focus provide on reinvestment, you to offer. best is service, we're laser the chosen on the competing reinvestment quality environment. that very regards more bit margin dollar. can the I think per Macau we And maybe Naturally, a we But with incremental to more focused on amenities Evan, a the competitive and resorts have update? on

Sure.

respect doing, elevating aggregate with of not think we're we're our to I spend. what level

elevated that I for believe QX. history that it we're continue I remained the it will market but -- the period through in the high we remained But of don't to think it and think come an that it eventually unwind down. long-term, accelerated, probably and at

food of and started out the flooding probably we us, beverage. terms you've specific with for seen floor things, by for everybody In

we period a QX pulled we I were the everyone was higher into premium the play quality of where Macau sort targeting that probably mass in diabetes the on of things floor, think given fewer those being players and drive have of there risk sort to beginning food of offerings out and offerings our refined back. to the and snacks on and that areas. more with amount was mass beverage of at premium at that floor we've now of our And higher given level

we're of And those so promotional we've been where dollars. in terms board across putting the refining things

significantly, in reduce significantly getting were I that have going to up. better get we're near-term, necessarily see don't have been aggregate And if I spend a coming in able do characterize going down where it into think that QX. but refined don't QX. sense done, say it the I to we on and what on better But to see we we will I return we've I the So I continue that to dollars, those don't it. know we're

If I your on OpEx. follow-up may

You of exciting of your guys are to City the things best to obviously very Dreams adding a service fulfill lot guests. to

we seen on to if as that these I consider of OpEx? So also you Have the was the peak year? OpEx opening? is Or half are going in we the the [ expectations? into comment hoping that on should you're could there's you to season Studio comment of investment second do OpEx going amenities your how second And City cost long that ] if does extend of could the new additional

from at in let lion's service And of over that late significant So service. left, doing and our would say start market. making come we but that terms the family when of nothing that. that all it Melco costs into and I done Melco months, I been leading the done. new the sure have colleagues a last of both innings me several expect that Dreams in with is say of the SC And rachet that the up look City refining, I the is delivering pretty the of to there's terms think we've and product guests we're are and of share wouldn't has new members of that now overall kind training,

while continuing to of I see could think from. so that majority bit, And trickle there is some I behind a are distinct mass us. There them up the little

we own the Dancing an line I item. example, has about not we're own and when that not the the there. making because, driver be as profit Dreams show obviously obviously, That's going think say, for and So go year City the positive as House property, always I so reopens. but in a so show of raise of Water will worried of its for to element right, next significant cost into at less will in traffic itself its also concerned been into just company, costs EBITDA

I quarters. for they year of residencies, in of my On Geoff, more the on year, the being know, one couple a financial Geoff. of stop you standpoint I the that's -- if on? how don't top know extend I will this to is for on next over head they're terms when to in defer terms in booked of being of out they the when going accounting that play comment can X might from don't

Yes. Happy that. take to

think the that second we the the was if shows about of about cost quarter, X.X. in residency So

X.X X.XX quarter. fourth I to in that looking the million daily about, with number, X.X. then talked impact more X third quarter So be is we We're more the gross suppose, the for residency like like and OpEx the the in

we we So might on an half apples-to-apples quarter second year-end. more over of referenced XXXX, something basis by like with to the think in the second see the X.X XXXX, of X.X that we that drift up

as to step we expense and incremental So saw stair said, second Evan half the we of for year into going X. second that the then fairly the up telegraphed modest the quarter

Joe questions JPMorgan. from The come the Greff from of line

soft. seeing of like Lawrence, at how we're trends in of sales looks bit in revenues Macau Greater Obviously, in retail least City little China, are retail things Dreams performing? like luxury It non-gaming a as a percentage fell at sales sequentially. GGR

give the how performed thus in things lines, it's a performing XQ? can sense you later far and XQ along the us in those If how of

a Hello, similar of premium it's Dreams. Studio retail and China the Joe. is rest we've repositioning to have part retail fortunately, still resort. of I -- think and Well, weak. from on of at And think a Macau Hong Kong we as a quite -- integrated into the City, a at And perspective, partner DFS City I family-friendly

and We have high-volume filled more business. retailers with affordable the

which where to And City so go I City, I think take jampacked helps people, if on that Studio of any think it's the property. now, we to day with want on front, the just positioning with you Studio

retailers, the of Dreams rest Hong and soft been retailers where in the it Kong. luxury with are, the For China line has high-end City of

think, economy the on of for the so is depends naturally, everybody I Greater And in the to businesses success recover Chinese because ultimately, any hoping the long-term Chinese economy. the of area health China

for Macau think that for matter. to Macau, Hainan Island I or, unique fortunately, its Hong has compared say, advantages Kong

that's the guess, I is Chinese to So quickly. hoping again, recover -- economy for everybody

can for helpful. if be your And you of this you by that balance us would of that disclose geography, CapEx remind year? could the And Geoff,

Yes.

$XX CapEx about on amounts with for $XX the Cyprus I'd for but Phase other Sri got of million then across our X, for of fairly Joe, say By million to Macau, million order Lanka. areas, corporate, project for the about on City $XX million the total, us the remainder Manila, region Studio million. $XX $XXX would some around remainder million. ballpark go bring left million de $XXX we've the and of -- is some Cyprus the about to Macau, for well as That that as will tail be $XXX So of year of in minimis for

come line of questions the CBRE. from from John The DeCree

start to allocation. a high at one Maybe capital level,

clear looks Geoff, attractive priority, kind deleveraging at the to of equity Lawrence, I and think, pretty same key where us. valuation quite look the been you. been of that we I you've the for but the has imagine it compelling is

curious on or share in a at repurchases bit point. or dividend you've these you've So the if little the given past calls, know resuming I much if thought talked some about

on get to allocation this curious your So capital thoughts at point. high-level

basis Hello, In elaborate. the extended as as John, still you get Geoff objective work, lot maybe can prepared XX of is I'll Geoff some months, and reduction obviously, later, we've hear, #X great well. from debt work over and remarks, our a done the team we've maturities delevering. the on But last that to and

X well beyond price fact But is it close levels. COVID, to with. of our valuation, levels coming talking pre-COVID down out sheet when quite the more our and Those be today would in the the we're we're think to are that about in shocking and is were we we yes, much not than I revenue those We're comfortable balance of So that better pandemic. share shape yet. levels terms

very, seeing closely it's we're it very prices at sense it because stage. So looking at extremely and these I think this makes share just tempting no

I a and valuable City is to trading than well. Melco MLCO think relative So more International, lot Studio at on basis, a holding MLCO a XX% company as is the premium

looking we're in any? it a think have So interesting and I know, is really at I don't day, all, you if all closely. very Geoff, it

shares. point I in value we see reiterate tremendous really the to the just suppose that

towards at tempting. will of perspective. valuation debt But addressing We levels some see you'll severely probably very a levels, share discounted us small reduction. free in repurchase it's maintain discipline some percentage divert these of at And cash I think from our these kind our

I Geoff, you in kind a prudence and entirely. that's and was Maybe we maybe certainly, talked help those if high-level and appreciate Pogo's just be headwinds Lawrence me. the wondering your Thanks, could and facing on, deleveraging follow-up synthesize lot [ on some on helpful. that market. I then comments of you your would the you're picture all going stuff economic about of agree Manila maybe obviously quickly are a There's there. what curious that And into and outlook for closing of view ] or fundamental

John, don't us for fantastic a his I off to I'll cash been but the cow because I Geoffry steal want over it has Andres thunder, hand Manila think to years.

I do think year. highlights talk is want of our be the Geoff, hey, to next you year Manila? to XXth going about But

interesting question. thank market John, you, Manila Lawrence, for a Thank now. and right you, the pretty is

this in Pogo need standpoint, be out, year. there's phased from controversial to president Pogo's market. in You they supply that increased end little And out also been recently Philippines has announced and fairly a be the the phased headwind there's been -- by of with government the the in some will a mentioned it the and the

to Manila, if hour takes north, geography the with with of And the -- so that down. you're especially it drive up good a familiar

a us But think, very being some mass into tourism up And to of that of and trips well there, of business guests. and course, about increased remain increased of and the still will from so we're Manila diversion seeing overall, benefit optimistic Philippines, some from government, the capacity commitment I and, future. I international supply small the the strong increased

from Praveen The Choudhary Stanley. line of questions come the from Morgan

the My Congratulations a that couple questions hope is on of are quarters simpler, getting well next questions. quarter weak. as up continues as which X years. in for GGR seasonally I

one I Water. House go and the first is to The Dancing of timing it of Personally, want check out.

question was is mentioned first to I'm employee And on time? final in second just that in this quarter. had should over property EBITDA what is, cost. see, XX% see theoretical you improving was QX? we question The trying And

X.X You X.X. mentioned OpEx to went your from

You gone give see has sure not X.X%. others increase. by Macau. increase mentioned up to labor did this in cost in We I'm OpEx had everybody X.X%

more your future? about or And just returns seems that in So in cost or soft market find we different? should growth to than increase. Can back how EBITDA this what talk near you is onetime share growth the be

Praveen, Lawrence. Hello, it's

he about the So House think question employee previous then Dancing talked call elaborate of it on He talked I maybe Water question the and QX. on can take about I'll in it. the Evan cost because

old of not So it's for show. House just a return Dancing Water, the of

are some we think XX year, it. next close adding to since new And be I will years by we it first elements into it. opened

So some technology. in there's advancement been

we So want the grand reopening, Dancing if Water, a real be spectacle. anything, to House it of

targeting for given heavy how of So of we're I machinery. machinery, a having the hoping some it's some with year. technologically are lot the difficulties of we think show But with a still end

I certain a want from QX. will don't want at to at because there's the acts beginning. same to open like So I probably the grand it time, eliminate think it in I -- don't And potentially, reopening,

So from everything available I sure X. to want day that is make

of icon very traffic traditionally people the tourism thousands of traffic, of always of excited of and of Water Dreams giving it's Macau. we're So has about us City it. Macau, an House to Dancing office additional been

that, So think. I excited about we're

show that and OpEx. fixed to recurring start to online And will on our from maybe reiterate part about day per a OpEx of X.X base cost call, be becomes just comes and and the prior supplement as impact the

OpEx. the on Oh,

about it the on QX Evan, I think, call. talked you

Sure.

we've trying is other The the is we apologize drift that given market. was gave. sure or we here. really to the I of gaming consistent with added what make and more get added guests. meaning that added We've servers to inclusive people were on the We've huge hours number in opening and for board, F&B the across rates more And up drive the will people to to number the that service of a increase just is confusion incremental hopefully revenues operators of floor the floor sure the it right we agree be on we So bulk incremental But can by rates set. against which not customer just day, the that floor understood are people gaming the make FTEs. throughout drive open of parts hotel the those were FTEs side. service traffic throughout new OpEx dealers so the that to X.X%, the We have

of so and the terms talked QX ramp-up we that in where about is we want and getting to in to And it service be. really product

revenues, hope that that start the want we're and we're it's guests, getting rates, to be, where get seeing our that quality our in of -- improving expectation drive do hope we'd service I that you all by to the return higher by product think near-term that we incremental is service. and to better and as felt our our be things we're it product going guest, to dividends in and exactly going would

these of And that. et I assume if in have how that's go make have the into do -- to as fast. Thailand moving still will cetera? if well? very, your you're sounds It Lawrence you that businesses Should Thailand. it's continue fund But lot a okay there things, we case, should you for headway to It's related and you more I like question with geographies. one very

Praveen. Hello,

of over Thailand the yes, So But our again, And year away. all jurisdictions, on bidding, a very Thailand at will the generational be it things and some quickly or Japan the it's with a progressed is other based level. time. experience these sure And still I'm opportunity. time, with take so

counteracts I priority. don't So reduction debt think our it

money I in would such amount don't meaningful any we'll there it. But be at that think an anybody And to is on opportunity. honestly of I the we -- interested foreseeable continue be think future. amazing are looking of course, going spent So in

The Joe of questions from come from line Chao Citi. the

City, just smart any rolled rollout want visit smart see I follow-up. gaming figure, some the been tables of didn't but smart you On floor, table tables to remind last us I my gaming Studio add at please? a to Dreams. please Would out your having I at City saw

George. Sure,

in I think floor line at the pace competitors our terms of of City, tables. in which Studio tables we have XX of X is the on rollout with of the of other kind

we we will all I I think them at end of October. the by Studio XXX And end think get as the contractually, get Dreams tables are of March, -- by all City, well. tables the City at of we'll the of contractually,

the I current So think that's rollout schedule.

only the And how thing see we these to to of sort again, wanted I'd add that, is, Lawrence, are.

the So number of floor they've been weeks. on a for

people of sort rollout adoption. If doing some been following you different by there guys smart have of the tables, obviously been have starts their fits and

as rolling prudent knock been least on wanted At it going very very, we a wood, were things be little out. to so we have bit So far, well.

continued them from our feel given So able day where the to be a to and open have good the I seeing what -- of think very we on. turned we about since rollout, being are continue initial we which and standpoint system all we're

that Geoff. operational I'd is the this Yes, delivery is add The is thing and only gap between becoming about month. to X

roughly So XXX on time November have frame site. tables those the live to

Jeanny to questions Ms. have will for We at remarks. no back closing now time. hand this Kim I further

and Thank in next quarter. the Thank again today, you. we with you for call look you forward speaking to participating

all you call. This for participating. Thank conference concludes today's

you. your lines. Thank You disconnect now may