An impressively strong performance in Macau was enough to see Melco Resorts & Entertainment comfortably beat consensus in 1Q25, with the company reporting a 10.8% year-on-year increase in total operating revenues to US$1.23 billion including a 12.2% rise in gaming revenues to US$1.02 billion.
The improved performance, which also saw net income climb to US$28 million and Adjusted EBITDA by 10.2% to US$313 million, was aided by favorable VIP hold although industry analysts noted that Melco still exceeded consensus on a normalized basis thanks to a record performance in the mass segment. Studio City also produced its best quarter since the pandemic, aided by the completion of major upgrade works at the main entrance, hotel lobbies and high limit areas on the main casino floor and Epic tower.
At flagship property City of Dreams Macau, total GGR was up 18% year-on-year and 10% quarter-on-quarter to US$735 million. While mass GGR was relatively steady at US$480 million, VIP revenues were up 79% year-on-year and 54% compared with the December quarter on a high 3.74% win rate. Slot GGR was up 3% year-on-year to US$29 million.
Adjusted Property EBITDA grew by 28% year-on-year to US$196 million.
At Studio City, total GGR increased by 6% year-on-year and 4% sequentially to US$336 million. The increase was more prominent than stated given that VIP gaming was removed from the property throughout the previous year. Mass GGR grew by 11% year-on-year to US$303 million and slots by 23% to US$33 million, while Adjusted Property EBITDA showed an 11% rise to US$97 million.
It was a tougher quarter for Altira, however, where GGR fell 24% year-on-year to US$28 million with a slight Adjusted Property EBITDA loss.
Nevertheless, Melco saw its Macau market share grow from 14.7% in 4Q24 to 15.7% in 1Q25 with the company stating this share had also held steady through April and into the recent Golden Week, prompting CBRE Equity Research to raise its FY25 EBITDA forecasts.
“It’s hard not to get excited about the inflection evidenced in Melco’s 4Q24 results in Macau, coupled with upbeat commentary on the start of 2Q25,” CBRE analyst John DeCree said in an overnight note.
“With recent share gains holding steady, increased opex discipline, normalizing promotional activity and strong market wide visitation trends during the May holiday period, we see upside to our forecast for Melco in Macau.”
Results outside of Macau were mixed. In Manila, total GGR fell by 13% year-on-year and 27% sequentially to US$109 million with all gaming segments suffering declines, including a 17% drop in mass table revenue to US$47 million. Adjusted Property EBITDA was down 21% to US$30 million.
City of Dreams Mediterranean, on the other hand, saw GGR up 10% year-on-year and 3% quarter-on-quarter to US$59 million. Of this, mass table GGR rose by 5% year-on-year to US$29 million and slots GGR by 16% to US$30 million, supporting a 10% increase in Adjusted Property EBITDA to US$12 million.
Melco Chairman and CEO Lawrence Ho said, “Macau Property EBITDA grew 32% quarter-over-quarter, demonstrating our strength and growth potential in Macau. Mass drop increased each month during the quarter, and we recorded our highest daily mass drop ever. The ongoing strength that we are seeing in our business momentum is a direct result of the combined efforts of our teams and the quality of our product offerings, and we will continue to build on this momentum.
“City of Dreams Manila was impacted by the increased competition in the market, while results at City of Dreams Mediterranean and our satellite casinos in Cyprus exhibited solid sequential and year-on-year growth despite the continued challenges posed by the conflicts in the region.
“And finally, the fit-out of the casino at City of Dreams Sri Lanka is progressing well and we continue to expect to commence casino operations in the third quarter of 2025.”
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