Melco Resorts & Entertainment Ltd reported higher group-wide rolling chip revenues in the third quarter of 2017, boosting adjusted property EBITDA to record highs.
Net revenue for the third quarter of 2017 was US$1.4 billion, an increase of 19 percent year-on-year. Melco said the increase in revenues was attributable to higher rolling chip revenues at City of Dreams and the commencement of rolling chip operations at Studio City in November 2016.
Adjusted property EBITDA was US$400.2 million for the third quarter of 2017, representing an increase of 38 percent.
On a U.S. GAAP basis, net income attributable to Melco Resorts & Entertainment Limited for the third quarter of 2017 was US$115.9 million, compared with US$62.0 million in the prior year period.
“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 in the third quarter of 2017,” said chairman and chief executive officer, Lawrence Ho.
“City of Dreams has once again proven itself to be the unequivocal leader in the premium end of the market, with ongoing improvements in mass table yields despite an increase in new supply in the market.”
“Studio City continues to ramp by delivering improvements in the mass market and rolling chip segments. Going forward, we will continue to refine our product offerings at Studio City with a range of extensive property upgrades planned over the next twelve months, including the planned redevelopment of the House of Magic and enhancements in the accessibility to the property.
“In The Philippines, City of Dreams Manila continues to enjoy strong year-on-year growth across all gaming segments, which enabled the property to deliver over 27 percent year-over-year growth in Adjusted property EBITDA, despite new supply in the Philippines.
On a Thursday note from Bernstein, the brokerage noted that the company gained market share in VIP and likely retained or slightly lost share in mass in the quarter.
However, VIP strength was a nice surprise, mass remains key for profitability, says Bernstein. “Morpheus remains a key catalyst with its opening in spring 2018 targeting premium mass.”