MLCO - Earnings call transcript Q3 2020 | Melco Resorts & Entertainment Limited

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Operator

Ladies and gentlemen, thank you for standing by. Thank you for participating in the Third Quarter 2020 Earnings Conference Call of Melco Resorts & Entertainment Limited. At this time, all participants are in a listen-only mode. After the call, we will conduct a question-and-answer session. Today's conference is being recorded. to call like to now would turn over the Mr. I of Director & of Huang, Melco Investor Richard Relations Resorts Entertainment Limited.

Richard Huang

Thank third quarter us today call. joining you XXXX for earnings for

Winkler; are Manila and Cyprus. Geoff On in and Lawrence call Property Presidents today Davis; the Evan and our Macau Ho;

statements federal get we securities forward-looking law. note the Safe discussion may that Before under today’s Harbor please contain started, made provision of

results Our from differ could actual results. anticipated

comparable non-GAAP discuss measures addition, a financial and reconciliation included may these the most In of release. to the in definition measures; GAAP are measures we earnings

on Finally, investor turn supplementary please Lawrence. note earnings that over call website. slides I’ll are that, posted our With to relations the

Lawrence Ho

Thank Richard hello you, everybody. and

and return Dreams, have the Phillipines our visa gaming August demand late travel XX% towards year’s the Benefitting September. a notable government Macau the experienced in of to the recovery the of of return gaming integrated the Cyprus the of at saw also partially to During and saw which casinos XQ and contributes restriction the the PAGCOR. any drove swift in third levels Chinese table games after mass approximately vast by our hospitality majority at and of visa operating improvements third level. relaxations with our to approach of quarter sequential In in cases limited gaming have City re-opened. domestic issuance in inbound EBITDA authorised of increased resumption Manila middle a last improved in seen of our from as operations June, revenues basis of gradual We pre-COVID quarter Guangdong trial COVID not from prudent Mainland which times the XQ. trends in operations visa on Business nationwide run Macau we IVS issuance resumption issuance, resumption late measures. help thanks visitation, reopening, operation border new resorts of Despite business out the

Looking the issuance, our resumption by we're communities colleagues, of visitation, inbound highest ensuring and ahead, remains safety of we the encouraged priority. our visa while operate which and the wellbeing in and growing customers

expect Melco’s segments, luxury use To months We upgrade mass, leadership good of faster to in faster few integrated premium benefit further COD. which to a we growth rebound have gaming various portfolio strengthen the past resorts. in of continue our and accelerate projects at premium the made

program. to New the With Melco anticipated remains reopen Nuwa Despite Chinese development Year. tower fully renovated the committed COVID-XX, Hotel currently global its before to

full project construction City next Phase space City's Gaming be in inventory increase completion, extended. Studio room towers will XXX where suites. Macau Studio hotel approximately is offering Our rooms Upon hotel major the and two, luxury with XX% be two two hotel new approximately will going steam will Phase by ahead. expansion

offering over will New progress XXX upon includes Dreams rooms. fine-dining also MICE one indoor integrated which state-of-the-art XXX good largest development of non-gaming be making Europe's added space. completion, outdoor machines resort, waterpark, Mediterranean, tables, largest a restaurants, slot be Cyprus,, we're attractions Cineplex, In City will and world's which of of XXXX with Gaming the and hotel

Turning IR. to leading world's in our remain bring to country, the commitment Japan, we to unwavering the

market attractive, world. gradual, Macau still level activities, the market will we to confident Japan. in represents be with believe while I demand medium respect the and team globally. Japan potential and global monitor term remain at the long and Last, is continues patient, prospects. that maintain expect stakeholders. convinced to gaming approach disciplined resort our recovery integrated we local all process We time, I to At development Our a with and this the national in remain engage in best key Macau’s most including remain growth new I Macau

strengthened Geoff our the also go turn overcome future. was over transactions, sheet that, With through near to investing while capital I'll Our for it us to recent numbers. market term balance enabling some challenges to by the of

Geoff Davis

be Thank reported in wide group you, $XX EBITDA luck-adjusted at third approximately while EBITDA positively City, EBITDA of affected Manila, million. COD came Macau, of favorable Lawrence. at negative win million, quarter property XXXX, negative In A we Studio the $XX rates COD a $X VIP overall basis, and our by Investor million. of million our Relations approximately million million, adjustments $XX found impacted posted Altira $X approximately $X by earnings $X supplementary slides were these consolidated positively million, and results respectively. can Details on website. in On

affected win the by also fluctuation, our rate performance provision. addition was debt In bad VIP our to

previously incurred the breakeven During $XX third revenue XXXX, now a affected to bad debt negatively upon approximately XXXX. achieve million business. and On and of we the compared by of year-over-year operations quarter adjusted pre-COVID company booked change faced expect conference upon EBITDA With cost gross basis, third in which reaching the EBITDA pre-COVID XX% property was million. achieve accrual million that that the revenues integrated call, approximately of mix XX% to a we as $XX of could approximately approximately successful On property gaming the third of our gaming bad revenue levels, $XX adjusted industry which charge and $XX our based of our on indicated in reaching reflect our mid-to-high provision the second gross challenges Macao Last, XX% charge levels. breakeven approximately revenue quarter we range mix by historical quarter to a quarter operations controls, we debt in EBITDA our a XXXX, debt of Macau bad affected positively EBITDA bonus million. to resort XXXX reversed global a improving

blended in XXXX. advantage notes favorable the in notes of optimize Melco balance $XXX approximately August, share placements, had July, Melco XXXX sheet September, these conditions Traditionally, of series for notes another Cyprus. capital capital at XXXX the market X.XX%. proceeds the structure, to notes Studio City, XXXX senior million facilities a issued million quarter X%, in structure, excluding Turning our of million clarity $X.X and average owned $XXX three of the of group, had million, the offering approximately issued provide $X.X gross subsequently within senior yield on and we of and had debt of sheet. as third and five XXX cash billion. X.X% of $XXX In more to Studio City Manila, approximately we to $X.X billion our Taking approximately due Studio million by notes regarding $XXX of tap our million of due City of the undrawn, Aided which our market XXXX end Philippines balance end August, of and to their To capital senior billion revolving for the entire XXXX. $XXX of wholly completed in transaction raising due of hand cash quarters brought Macau private approximately strengthen

million for related our we’ll Q&A. the give capitalized approximately some to is includes $XX to finance consolidated and normally expected which to non-operating $X line remarks. have concludes interest do, and expense items million Operator million quarter. we million $XX $XXX interest interest. expense upcoming $XX $XXX As Manila, million, $XX million. is come and expense you $XX of City be lease approximately on That Corporate million expected to for million the depreciation approximately is guidance to of at you in to prepared to amortization Total expected Dreams be to net back

Operator

you. [Operator Instructions] Thank

America. First question the comes ahead. of Billy of of [Indiscernible] from line Bank Please go

Unidentified Analyst

provide follow mind recently, first on whether Thanks heard to or few the can all, end the last the a that mentioning more is here. the I questions weeks. few is And the mass a have high provide in of better you volume bit of peers premium on like premium recovery the what ground pickup right also up mass Good in that Like end bit a lot. are would signaling weeks, of low you color, driven. have evening. also some a of more your premium last actually see you especially doing now? color of more mass, And we couple keep they seen

Lawrence Ho

here. Lawrence it’s Billy, Hi

earnings we've what out be on always the and As be is had the last to anticipated. very to predicted we plotting anticipated gradual, we call I it think recovery exactly

I what seen give I color. it think for we've why details over to more pass Davis on to don't ground, the of

Geoff Davis

Thanks Hey Lawrence. Billy. Sure.

IVS color is of seen premium gone mass still essentially, in I terms of our our coming of kind you've A the pretty calls. But we've working So other Again, a as about well, the the right we've average seen players bets is some in in noted down messed a now. having well think to it's from And changed actually what our Playing just lot us a for has think the And it's more and players bit called some much. not we've of what's in we're that with a XX% of are had higher up. of volumes of more little overall, our a pleased of what of seem is IVS, writings how our before. out of I what of Guangdong non-Guangdong terms lot still and on come come trouble, back, mass be cautious. coming have of in But back. their well out premium little worked kind get probably region. been lot lower. we're now things currently the more players are players heard fairly maybe fairly probably been are bit bit we've it's right what's back. about we're where seeing bit, bit playing more a little to meaning They time a that

things the much is of little seen players that between properties One of don't a the the now. kinds as other we've bit that move

just go from a check to the out you and casinos. So having as properties you're kind of as the COVID. and property each property reaction through or of more the going to probably think in that's to And I difficulty go of through of a

Unidentified Analyst

on thanks. see that. color. the up Really follow But I appreciate Alright, just

back mentioned, you the wise, given is now. XX%. think I that is As profitability mentioned Does it's company the Geoff back already to point lower that volume to means breakeven getting

Geoff Davis

a Geoff. played of for theo of $XX we includes in unlucky, marginally we territory. bit a that And roughly month expense. debt So are million but bad basis, Yes, positive October, this on [ph] the is EBITDA

Unidentified Analyst

So like, given takeaway final you Will operations? on flow reallocate just news activities or other to or is Chinese changing for the segment in the rooms junket premium about question, and China? And junket cracking COVID? headline more obstacles government tables company or down resources Thanks. the markets strategy from probably news the

Lawrence Ho

Hey, Billy it’s Lawrence.

in So segment, market I XX to the less we focused the anything, anticipating last we've plus, shift. pioneered think, very been years, over premium the mass

junket anti team a moment at on with And, I of have, overseas there'll segment. we think long anti that positives focusing to gaming cater Macau, campaign gaming. suited and I or course, because term the to for very great time, they're up after campaign, well So current thought in think some be that all,

and think have a operational due terms that more have we'll job of guess, And back always so Macau his don't on market in know, of and David color done come his and traffic add. managing to for team diverted to I is. I be team Macau. some the what But David course, I you senior see in to level, great the if

David Sisk

Yeah, things. I think couple a of

I always, first XX% look VIP junket about is, profitability. thing our think the the profitability, that at you of business business our if represents or we've

portion of our not drive a we huge revenues. it's So where

no and that players, our mentioned, premium made back it. in casino big downtime exception that's our our mass, made had our investment great towards in And And always we've experiences COVID. Lawrence big certainly this during mass again, for in investments our both creating the dining. rooms for improving and We've a we've our class players. As

to you, for to, a net, say as we positive us kind overall. alluding I'd Lastly, of net think was Lawrence it's

direct Now, places through these long or through back overall net and business junkets of comes whether premium comes think business. We it from this. term we're that the other our beneficiary

Unidentified Analyst

Thanks so much.

Operator

you. Thank

Joe Next the question from of is of JPMorgan. ahead. Greff line Please go

Joe Greff

of terms One efforts wants and incrementally David it. recently? about everyone. under gone for what of to Chinese you hearing to Jeff, Mainlanders for IVS? Lawrence, or or on whoever bottlenecks answer two Can visas the If questions. more sets Mainland you're Hello, some China's maybe to And maybe reduce get timelines of in talk what's

Lawrence Ho

David, to more detail? give you want

David Sisk

take Sure Sure, I’ll absolutely. that one.

So and the funny incredibly because cities. China, Joe, the it's between in it's kind inconsistent provinces of

lot inconsistent early Guangdong, the is been kind incredible can can't One here. October see basically, still Province, come that to inconsistency of can just other XX a came for what of on. that If can back We you non-Guangdong in in a things A the it seems happens can of our two real go haven't Guangdong take And and you seen take months. consistent it application a would they that told have to pattern go days. of be the day. players sometimes than

really been get we as we've our So to can. focusing as quickly back on players trying

We to contacts, kind continue miss. really our it's kind but and of maintain hit of

to we the working are a going normal it's back but day just be this City and really cities, going And answer they one just the a a or to to feverishly, depends months be on I going think that's we to are point. return But get it's again, answer it Province in I the day. while the for Province sooner It's honestly, inconsistent one between things and another and while. that the it's at of So then -- just inconsistent it's and get it somewhat for just period. incredibly even be two later, works says will way a come think think in can I

Joe Greff

bad you, Geoff, from at of Thank in to that the that's rate the assumption the with math your it's mentioned mid-to-high run the know, great. behind David. for you eating comments behind incremental, I few respect the here? threshold sort debt last assumptions the And, obviously, it's what's monthly the XQ, XX% quarters, of something breakeven. EBITDA threshold EBITDA away been Okay, for level What's new sort breakeven? at as of October, of sort same

Geoff Davis

end top of of debts excluding debts. range, the that's say on end that's bad the range, So I towards bad would and including bottom the the

Joe Greff

from on from taken, at of assumption me back an hits of months, eight the at you quixotic mean, sort think like But that last when that maybe the think collections. maybe what this of Do depends point? you or the is or, obviously, I look most you've done, you've outside? seven, you someone sort

Geoff Davis

see, we've that for has our We think majority GGR that back. as of that I some think reverse do know, the start this visitors you At but very point, we as in breakeven we been Well, provisioning. conservative year, collecting, been in not our to guidance. assumed starts come

Joe Greff

is final how of one question much provisioning, the on versus just junket? direct And that

Geoff Davis

Predominantly direct.

Joe Greff

you. thank Great,

Operator

Thank you.

of Engel of from Please Next the Edward question is line Macquarie. go ahead.

Edward Engel

business been for taking in Of Or overall? the you similar? the have question. the seen thank cover Hi, my mass seen Have XX% they October. you you've business generally outperforming VIP

Geoff Davis

one. I’ll Lawrence, that take

Lawrence Ho

Yes, please go ahead.

Geoff Davis

Okay, sure.

and by Kong being been junket challenged Hong the business visa that So has honestly, process, the VIP closed. business somewhat

of mass, we're of So XX% is the that mass. seeing that out coming our and particularly premium

Edward Engel

thank to November? by And did Or start for then of seeing that. the end by Okay, mean, you you week throughout then plateau week of kind visitation month, the you and into momentum see October? I were

Geoff Davis

and second won't seen back started in saw the then once week. We I So right is nice Guinness started. third is We Golden is what but slowed slowed. pickup, has up in say week, we've Week saw it opened it October, it's after slowed. that period a that up a we plateaued, visitation the picking

the a we resolved. in coming We opened visas I lot through the up had think for we of when noticed when non-Guangdong. Honestly, was September. that more

or Guangdong As a started the we coming about visa through. there's came up three lag week the for two before

but that So on good with weekends, visitation, we It non-Guangdong it happen the better somewhat. somewhat a opened we're slowed visitation has saw seeing still it when again, up.

bit. get we out of timing period Now down after again, it typically someone again, who's October does slow that a that

has just and it's So calendar slowed. But as be and seeing of still it the small may pickup function we're calendar a well. a the works how more just certainly

Edward Engel

color. Great. the Thank you for

Operator

you. Thank

of ahead. Next line Please from Chinchilla the question is go Bank. Ricardo Deutsche of

Ricardo Chinchilla

taking question. for the guys, Hey thanks

just and to know provide with CapEx XXXX, plan looking in Just into to [ph]? GCD little bit color group I some still wholly-owned a early. you regards flow the can that's But probably looking source the

Lawrence Ho

for approximately will roughly so of of Cyprus, Phase be about for XXXX of City we CapEx, Sure, be that two. XXX and anticipate a billion that Studio XXX for would

Ricardo Chinchilla

It's property. right? the for maintenance the about thinking balance And of address, wholly-owned the

Lawrence Ho

Combination then small projects. of maintenance, growth mostly maintenance also

Ricardo Chinchilla

comment some any, on or junket issues little can you please seen capital side? China? are of outside any from you And liquidity of impact have guys you curves seeing bit Great. from outside Do the of what the a

Lawrence Ho

can take David, you Hey that?

David Sisk

from it's of Hong in standpoint, closed. kind and seeing we're IVS being here players it still again, the to difficult Sure, get with still Kong for is

So players just think cautious I the with that are being the junkets are getting in. they

I they has do and do with doing think are overall, little some it more Kong being has to I more bit. Hong with struggling terms they're of think to collections in a IVS closed. But

Ricardo Chinchilla

Perfect. Thank you so much.

Operator

Thank now the Richard go to Mr. Huang. I'd hand to And ahead. you. conference back Please like

Richard Huang

conference for call next you filing forward for Thank We speaking to in quarter. you today. with our again All right. look

Operator

ladies for participating and gentlemen, you, and the you. for that conference today Thank concludes thank you

all now may disconnect. You

Melco Resorts & Entertainment Limited (MLCO) 5 Nov 202020 Q3 Earnings call transcript