Melco Resorts and Entertainment has retained its strategic orientation on securing different avenues of global growth, while developers and operators also applaud the leadership of Macau during the health crisis.
As covid-19 continues to influence the activities, financial position and prospects of the group during the second quarter of 2020, after a series of declines in Q1, Melco has moved to issue updates on current developments and growth.
With closures impacting the entire portfolio of the group, casino gaming operations in the Philippines remain shutdown during this time , despite a government implementing modified enhanced community quarantine, while the Studio City and City of Dreams Mediterranean projects are gaining extended construction time frames.
Melco’s chairman and Ceo, Lawrence Ho, explained: “Melco remains committed to its global development program. Construction on the expansion of Studio City is progressing. Upon completion, it will offer approximately 900 additional luxury hotel rooms and suites, one of the world’s largest indoor/outdoor water parks, a Cineplex, fine-dining restaurants and state-of-the-art MICE space.
“In Europe, we are developing City of Dreams Mediterranean, which, upon completion, will be Europe’s largest integrated resort with 500 luxury hotel rooms, a 1,500-seat amphitheater and approximately 10,000m2 of MICE space.”
Before reasserting Japanese aspirations: “Lastly, Japan continues to be a core focus for us. We believe our focus on the Asian premium segment, a portfolio of high-quality assets, devotion to craftsmanship, dedication to world-class entertainment offerings, market-leading social safeguard systems, established track record of successful partnerships, culture of exceptional guest service, and commitment to employee development puts Melco in a strong position to help Yokohama realise the vision of developing a world-leading IR with a unique, Japanese touch.”
Operating income for the first quarter of 2020 was $811.1 million, marking a decrease of around 41 percent from $1.38 billion for the same time of 2019.
The decrease was primarily attributable to softer performance in all gaming segments and non-gaming operations resulting from the temporary closure of casinos in Macau and increased quarantine and social distancing measures to mitigate the COVID-19 outbreak.
The operating loss for the first quarter of 2020 was $149.9 million (2019: $191.1 million), the adjusted property EBITDA fell to $75.3 million (2019: $413.5 million), and the net loss attributable to Melco was $364 million (2019: $120.1 million).
Ho remarked:“With COVID-19 posing unprecedented challenges to the tourism industry and integrated resort facilities around the world, I would like to express my sincere gratitude to the PRC and the Macau SAR governments for their proactive response to contain the spread of the virus. I would also like to thank the Macau Chief Executive for his decisive leadership, which is exactly what we need in these difficult times.
“Melco continues to manage its balance sheet in a prudent manner. As of March 31, 2020, we had cash and cash equivalents of over US$1.2bn. With the entry into a new senior facilities agreement in April 2020, we have undrawn revolver capacity of approximately US$1.6bn.
“In addition, we further bolstered our balance sheet with our sale of the shares we held in Crown Resorts Limited, resulting in gross sales proceeds of approximately US$355m. To preserve liquidity in light of the COVID-19 pandemic and to continue investing in our business, the board has decided to suspend the company’s quarterly dividend program.
“This is a prudent course of action given current conditions. Melco remains committed to returning capital to shareholders with a regular quarterly dividend and will evaluate the resumption of its quarterly dividend as the operating environment evolves. While we are focused on managing costs during this challenging demand environment, we remain fully committed to the long term development of our valued colleagues.
“As an employer of choice with a strong and deep heritage in Macau, we believe that our long-term success is dependent on the hard work and dedication of our colleagues, and the development of Macau into a world-leading tourism and entertainment destination.
“Our commitment to employee development and community support is evidenced by our market-leading training programs and our recent donations to the Red Cross Society of China Hubei Branch, the Macao Federation of Trade Unions, the Women’s General Association of Macau, the Cyprus Ministry of Health and to the affected families and healthcare professionals in the Philippines.”