Melco Resorts & Entertainment Limited has booked a 19% year-on-year increase in revenue for the third quarter of 2017 to US$1.38 billion, due primarily to improved VIP at its flagship Macau property City of Dreams and the introduction of VIP at Studio City.
On a US GAAP basis, operating income for 3Q17 grew 77% to US$192.7 million, up from US$108.9 million 12 months earlier, while Adjusted property EBITDA rose 38% to US$400.2 million from US$289.2 million in 3Q16.
Net revenue at City of Dreams enjoyed a 15.2% increase to US$715.9 million with Adjusted EBITDA up 55.2% to US$246.4 million. Melco Resorts said the year-on-year improvement in Adjusted EBITDA was primarily a result of higher rolling chip revenues and recovery of previously provided doubtful debt, partially offset by lower mass market table games revenues.
Rolling chip volume totaled US$11.2 billion for the third quarter of 2017 versus US$10.6 billion in the third quarter of 2016, with win rate coming in well above the expected win rate at 3.5%.
Mass market table games drop increased slightly to US$1.15 billion compared with US$1.09 billion 12 months earlier, although hold percentage fell to 32.3%. Gaming machine handle fell 2.1% to US$981.7 million.
At nearby Studio City, net revenue for the quarter grew 67.5% to US$384.5 million after VIP gaming was added in November 2016. Adjusted EBITDA came in at US$95.6 million, up from US$52.7 million 12 months earlier, with rolling chip volume totaling US$5.1 billion. The rolling chip win rate was particularly high at 4.0% in the third quarter.
Mass market table games drop increased to US$747.1 million compared with US$657.6 million in 3Q16 while gaming machine handle was US$581.2 million, down slightly from US$587.9 million in the prior year period.
City of Dreams Manila also enjoyed a revenue increase, up 13.1% to US$148.2 million while Adjusted EBITDA grew to US$57.3 million from US$45.0 million in 3Q16. Rolling chip volume was again the key, totaling US$3.0 billion compared with US$1.6 billion in the third quarter of 2016. The rolling chip win rate was 2.5%, slightly below the expected range of 2.7% to 3.0%.
Mass market table games drop increased 18.6% to US$174.1 million with gaming machine handle of US$757.3 million, up from US$597.0 million in the third quarter of 2016.
However, Altira Macau suffered a significant decline with net revenue falling from US$128.8 million in 3Q16 to US$89.3 million and Adjusted EBITDA from US$14 million to US$5.6 million.
Melco Resorts Chairman and CEO Lawrence Ho said, “A strong contribution from all gaming segments, aided by a sustained recovery in Macau and ongoing strength in the fast growing Philippines gaming market, continues to drive our company’s overall profitability which enabled us to deliver our all-time record Adjusted property EBITDA of US$400.2 million in the third quarter of 2017.
“Gaming revenue growth momentum in Macau has remained strong, with October 2017 marking the 15th consecutive month of positive year-over-year growth. Looking out, we believe there are multiple drivers of long term growth for Macau, powered by ongoing expansion of the increasingly consumption driven middle-to-upper class in China, improving accessibility into and mobility around Macau, and the continuing build-out of non-gaming amenities, which we believe support an increase in the number of tourists and length of stay.”
Mr Ho also reaffirmed the company’s growth plans, adding, “We continue to focus on new expansion opportunities to deliver long term value for our shareholders, which include the transformational integrated resort opportunity in Japan.
“We believe that our track record of delivering high quality and unique integrated resorts, our market-leading social safeguard systems, and commitment to being an ideal partner to local governments and communities alike places us in a strong position to compete for a license in this exciting market.”
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