Melco Resorts & Entertainment said its Q2 revenue rose 17 percent, helped by the opening of its Morpheus Hotel in June last year and higher hold rates, though performance at its City of Dreams Manila property weakened on increased competition.
Total operating revenues for the second quarter of 2019 were US$1.44 billion. Adjusted property EBITDA was a record US$442.2 million, up 24 percent from the second quarter of 2018. Net income was $100.3 million, or US$0.22 per ADS, compared with US$57.3 million, or US$0.12 per ADS, in the second quarter of 2018.
“The further ramp up of the award-winning Morpheus and opening of the new VIP area on the second floor helped City of Dreams deliver a strong set of results in the second quarter of 2019, with VIP volumes, mass table gaming revenue and Property EBITDA all experiencing significant growth,” CEO Lawrence Ho said in a stock exchange filing.
“During the second quarter, Studio City and Altira also delivered strong mass table gaming revenue growth, highlighting strength in Macau’s mass gaming market and Melco’s dominant foothold in the city’s mass and premium mass gaming segments.”
At City of Dreams Macau, total operating revenues increased to$790.8 million compared to US$577.8 million.
Rolling chip volumes totaled $14.9 billion, up from $10.5 billion in the second quarter of 2018. The rolling chip win rate was 3.16 percent in the second quarter of 2019 versus 2.88 percent, slightly higher than the normal range.
Mass market table games drop increased to $1.37 billion from $1.18 billion. The mass market table games hold percentage was 31.6 percent, up from 28.4 percent in the second quarter of 2018.
Gaming machine handle was $1.037 billion, slightly lower than the $1.11 billion last year.
At Studio City, the group’s mass market segment performed strongly, though VIP business was hit hard by the regional slowdown. The company has said it will cease VIP gaming at the property from 2020.
Total operating revenues at Studio City were $328.9 million compared to $314.1 million, though VIP rolling volume fell by about half to $3.1 billion.
Mass market table games drop increased to $877.0 million compared with $814.3 million and was also helped by higher hold rates of 29.2 percent up from 24.5 percent.
However, City of Dreams Manila, formerly the group’s star performer, greater competition ate into results.
Revenues edged higher to $176.1 million compared to $173.9 million, while adjusted EBITDA slipped to $82.8 million from $87.3 million in the comparable period of 2018.
Rolling chip volumes totaled $1.9 billion down sharply from $3.0 billion in the second quarter of 2018. The rolling chip win rate was 5.21 percent in the second quarter of 2019 versus 3.70 percent in the second quarter of 2018. The expected rolling chip win rate range is 2.85 percent – 3.15 percent.
Mass market table games drop decreased to $192.8 million from $196.9 million. The mass market table games hold percentage was 30.4 percent in the second quarter of 2019 compared to 29.4 percent in the second quarter of 2018.
“Lastly, Japan continues to be a core focus for us,” Ho said. “In May, we released designs of our proposed Osaka Integrated Resort – City of the Future. We have also participated in the Yokohama RFI and will participate in the Osaka RFC. With our focus on the Asian premium segment, high quality assets, dedication to world-class entertainment offerings, market-leading social safeguards and compliance culture, and our commitment to being an ideal partner to local governments and communities alike, we believe Melco is in a strong position to help Japan realize a vision for an integrated resort development with unique Japanese touch.”