MLCO - Earnings call transcript Q4 2020 | Melco Resorts & Entertainment Limited

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Operator

Ladies and gentlemen, thank you for participating in the Fourth 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 Q&A session. Today's conference call is being recorded. I would now like to turn the call over to Mr. Mazik. Timothy you. Thank sir. ahead Please go

Timothy Mazik

Thank you XXXX our quarter today joining call. us earnings for fourth for

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

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

differ could results results. actual our anticipated Our from

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

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

Lawrence Ho

thank hello Alright, everyone. and Tim you,

During the the the towards Mainland despite continued levels increasing experience fourth COVID and border Chinese cases reopening. government Macau a and measures world, resorts prudent both to gradual throughout approach recovery to business our quarter, in the integrated thanks

lifted and transmitted the quarantine of Macau. were our any we issuance, of reported of from are in We two in not the saw contributed and see to improvements which on the and remain cities mass Macau, In locally from our our increased ensuring in to colleagues, there quarantine XXX on who restrictions highest which in medium have those global the continue We Macau quarter Mainland citizens renewal customers, list, EBITDA our remaining volume, with Chinese Mainland for the returning remains notable no Earlier resumption our we COVID We the sequential Benefitting the Macau. visa all are pre-COVID our in week, those days. notably, vast priority. of operate cases times well-being near-term. this majority top operation business the positive safety both from games communities seen Macau’s traveling More to over operations fourth the overall operations. risk quarter. EBITDA restrictions continue and China in for from while recovery to third Macau the optimistic Macau property expect improvements for visitation all table

and premium a in of expect benefit premium to the Melco’s growth faster direct faster both resorts. continue integrated and We luxury rebound segments which portfolio will mass

expectation current in Business property hospitality to trends a of Philippines positive pent-up and operations March. benefits or begin of improve that run as bases the by see to Dreams starting Manila, Our mid-to-late on in is gaming PAGCOR. continue demand EBITDA will the we running limited trial City authorized without generated

of from the Despite quarter. full demand the XXXX, return Cyprus to during While of global there gaming a partial casinos XXth closure global closure that the in our a casinos second domestic the Cyprus to program. government development a an fourth remained increasing was COVID from swift number at a quarter This of cases the third in lockdown its pandemic, November of December Melco resulted and committed Xst. announce

us at Nuwa rooms our Our increase five the the reducing with also new of in next Phase inventory the star our near Dreams tower indoor We reopening renovation a restaurants, XXXX. in and two space. works offerings the largest of will all renovated as suites. expanded detail and the all in countdown countdown open an world's product the in enhancing star plan fine-dining further one will targeted and across continue and to Macau position offering three The XX% be a to competitive close waterpark, towers upgraded into further X be expected XXX at medium-term developmental Mediterranean Dreams give City Macau. new approximately state-of-the-art transforming end of where is Dreams outdoor Phase the with to five City's Cyprus Macau square MICE at hotels Europe's our rooms including of expansion leading in Studio variety the approximately a added hotel Studio at over by In property be Gaming outdoor and amphitheater, completion, our integrated attractions luxury To outlets continues XXX is with towers the City hotel approximately and will room ongoing. is of will adventure hotel completion, fully Cineplex, and MICE X to major March. premium retail. luxury luxury largest XX,XXX resort of between park, a Upon it strengthen City space, of the MICEspaceand edge meters fine-dining progress. will an project family After the non-gaming construction City spaces

we there our Japan, commitment market. world-leading to a bringing to to pursue highlight opportunities within the want Turning IR to continue and

respect has the same Japan. time, we activities process to remain initiating it renewed While again At that momentum We Japan remain the has new globally. complex, best RFC remains including delayed as gaming development approach and potential the disciplined with jurisdictions been processes. maintain represents all and market our in will convinced Japan patient

confident remain still I attractive the prospects. I Macau’s Macau is in long-term world. Finally, most in and market medium believe the resort integrated growth

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

Geoff Davis

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

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

million debt $XX provision by approximately the of negatively million. affected year-over-year a million in change a On incurred we XXXX, $XX a quarter fourth bad as to approximately of a in of of debt XXXX. EBITDA fourth the charge debt $XX bad the bad charge the compared approximately basis, quarter During

Additionally, our $XX reversal. impacted positively EBITDA was XXXX by a fourth million quarter bonus

rate market for balance The due optimize senior the in due and billion $X markets X.XXX% an in debt of structure, of and Cyprus when to gross billion our had priced XXXX. $X.X Philippines $XXX million of Manila XXXX. utilize The approximately in until end $X.X for billion. approximately was our of the X% XXXX resulted X end provide The tap revolver due an to of general proceeds undrawn maturity remainder proceeds $XXX in our transactions our cash in used of X.XX% raised additional notes of approximately quarter $XXX Studio sheet, used on borrowing This Macau structure, corporate the refinance to of facilities Studio issued capital effective on-hand. had to more Pro pro which senior million our and next balance extended CapEx of excluding the reduced $XXX of the million At forma senior we of material billion, quarter par and combined approximately capital Studio of be at borrowing January, Also City, the our XXXX. conditions approximately implies City $X.X cash notes in December, rate Turning approximately the for clarity Melco City's tap would available billion and purposes. the XXXX XXX and been debt Phase with notes were a maturity not January of Melco at December. transaction favorable with at our liquidity average forma January, with capital X.X%. fourth profile cash at our approximately $X.X million. end the operations in To have the to of

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

Operator

question line Joe Certainly. the Please [Operator of first the from from JP Morgan. have go We Instructions] Greff ahead.

Joe Greff

and Good and much how mid-to-late I end in clear more least or travel relative question. of what's expectations evening this probably to from has optimistic in year how my issuance ruining Lawrence, is for about for more recovery had our much you taking you're China? from guys. just attention. visitation ago? is obviously you Can is this easing, this guess mean, you three Thank positives coming about part to caught months And most in optimism visa near-term. to increased March the ease the rooted And increased Mainland the your of comments your optimism some we recently restrictions us today of traction telling at talk I

Lawrence Ho

level more Joe. Hi, details. don’t on the high Why of like to Sure. I'll I the should give and it give so David pass it

from more can demand also seeing are even China. And Mainland of end week. the is optimism New And beginning with was March session I strongly of quarantine Chinese back come two what think on that coming cities meetings. major really there And always with seeing tail kinds the political from our no Year. how of last happened the as

in very ago think world, QX, I year are And the with were happening roll-out many this gradual. just be and rest XXXX that, think China say very slow there for one honestly the the see very better. this to incrementally did are vaccine going the -- a is first to and we I getting of the after when call I that pieces we

in end successful it so And the the at we And tunnel. finally, of controlled look virus. seeing think are very impressive the China how has consumption behavior and the given the at I is China, light Macau when also we

those Taiwan think of between Macau. there Taiwan a little I route all was has and it's that resumed bit of and pieces together the even today So, with news

don't pieces of seeing we and of strong added was. how together end I think thing all the New these David? know the Chinese are I So, little Year main tail

David Sisk

things. are of And couple Yes. there

New one mentioned as I the tail Year. Chinese think the end things of of Lawrence

to going Macau well that in happen what's put on because we expectations pretty restrictions has have the out of there. Going

started the seeing that pretty Year, we And than started then Chinese As Chinese for New of came dropping, in just to happen. going was it's more we thought much play late arrivals quality New we for Year. these that incredible restrictions the

how and right seeing started to it seeing we the So, fourth kind started pointing build-up we once the up drop-off. those restrictions quarter, return after of drop how started that a restrictions January, of week fast fast the in then were But play down. coming first

IVS pretty reiterate just coming hadn't the really which back, a that and comes come, some and -- and that customers things want other these customers that before. happy we in more more made want to us are -- As in Guangdong play I start we lot region, coming seen that started seeing into to

seen atleast We customers that indirect also saw hadn't before ayear. for and pretty we

we want So, here. to people know come who with demands out the there

going that So, they're as of are things know starting to think to to come if come, these the travelers number as for vaccine so them we continue it things able going we make it's the roll-out, improve. easier are like and to improve, the to to,

turned think corner hopefully we a we that again, here. So

Lawrence Ho

And to add the something. David bureau So visas, and the they e-channel of for speaking and are to restarting reminded of to then proactively restarting me China various talking more Joe, on group very in of one relevant the government, terms levels I'll tours. the thing

And into appetite think the easier control that on. incremental working saw who of it being And sort is there. we get lastly. So, people COVID that under lot once returns there's China, for and -- then definitely we positive do with visitation a of with they're the in it's Macau,

Joe Greff

thoughts. very Thank much Great. the you for

Operator

Thank you.

We next of the have Billy Please question our America. Bank go from ahead. Ng from of the line

Billy Ng

three of mentioned, Hong e-channel like order is previous reconnection including types the should also fluid transit and bit and to that away? want situation border for the border more What still hosting the months a other regarding be us normalization or just thanks the expect bit following I timing And couple of your seeing of of visas, realistically that personal quite evening, Will the think Macau we travel still you Lawrence about know six give some the a visa. terms normalization. group in would a Kong, to good follow-up is it including like to next will the Hi, more like be call. and comment normalization, months relaxation? but with you thoughts the following lot mind I

Lawrence Ho

very been Billy Hong the at for Macau, the at how roll-out Macau, honestly look all the like the we I the most we most XX% feel you And and is -- Hong seeing vaccine probably end were think Kong, day, Kong. But Taiwan, and I I in China China, last Debbie And again Greater the -- Downer. realistic. believe of we've year, over business. pessimistic China, of

and that's year the it the to think do I the really of again, going started -- the Macau think in or been longer. Chinese I months and is looking e-channel than some smoothly last up So, longer three to I for this assuming vaccine Hong I between -- feel discussion restarting is Macau, two government. key roll-out stuff, started at it the restart. we've Kong, like rather But is and ultimately

think do two I or three it's months. So, probably

sometime some Kong, hopefully QX very taken of we'll And maybe scientific Macau, QX normalization. a China and So, end has in approach. see Hong

right local So a told Kong I Hong is even that Hong China transmitted having thing than the that Macau start daily code, Kong, if I is and health XX% have of about XX cases. sharing our yes business, that over has think XX% they Macau the think and -- clearly fewer they which now

reopen. think I will code that

is because And number so a there that of are close Hong incremental to lot positive Kong now. really

see XX -- positive a time So negative. for months, first than I in again, more lot the we nearly

Billy Ng

second that want type do back seen see behavior just you you just customers. to the that of new bit appreciated? you customers and just color spend have question quite about us type will or customers. New mentioned, reason they as a time, change you a different to And you lot for some share my that Any is Thanks. traffic. spending same color the power. of more compared Week, more haven't But bit is some customers their or get they Year helpful. Can more And very bit the tell a a traffic like be Golden you That's been the and Chinese a guys is are spend, of the also or can see

Lawrence Ho

I the let details. think go David into

think I to very week Week especially but --. Golden compared surprisingly, we favorably the last

David Sisk

that XXXX, maybe our see is of posted. our premium mass/mass I premium to on our take seen mass a not premium. by Golden in and Week direct. due both away. the been now the visitation But to definitely obviously in we that We've return Yes, October premium government right has segments yet, numbers because can this led it's couple the the the you think being things Obviously,

had that one think the in, best nights, we've coming look since feel maybe this of out I theoretical our I seen sold room occupied one away you and the per fourth quarter at the if from we to room, XXXX. that look hotels. room you other in take is, weren't we the players But the our if thing at it's

optimistic before, think freeing and jump out Like the be come. to things up They there. the and just we're need again, customers we I calls, we demand that to just there. allowed we more. from more things think into many we We will is to know look want are here, said, So come know future as

pretty we cities started when the as window. for but they or coming; off started and go got that a coming amazing weren't arrivals of back very players they So, had ended said them And pretty the of day they up We've extraordinary the in. it has many it people us. moving number dropping either have came list. of booking was Macau that so look number as Traditionally, was and cancelled provinces and late

optimism Year we it customers forward room again, Week. like better go as want come. was know for the again New a So but wasn’t than weren't it normally much seen to there's we've it sold we we And it out, at think for here. was Chinese We October Golden

Billy Ng

Thank helpful. very you. that's Again,

Operator

you. Thank

line We have from of Stanley. from our go next question Please the Morgan ahead. Choudhary Praveen

Praveen Choudhary

up. then also Lawrence, help think Quick from David. hi and hi is Hi I because Geoff, better Macau important is China consecutive us the opening, most Kong near-term just for question all looking Macau. either were And we of in full-fledged Hong me. I cases I that open Thank before update of obviously opens opening, And Is second, lot a One access reasons, some there a assumption to zero numerical a two Kong some realistic trying On get you which Kong the that of if Hong the on Singapore things some what's then of or number changed local easy Hong comments up Macau Kong in you. we December to questions. Hong to seven please. that's vaccinated. or vaccination? Could people numerical are have and were with these made questions. and when have your getting And show to needs days

Lawrence Ho

the guess hear question didn't I to Praveen, so me perfectly. But try Hey, let what.

think my Kong cases. transmitted angle Macau's Hong prepared Macau remarks, and of the has between I Macau what from is locally is first anniversary in zero nearing changed

and the So, agreement government from am the is market. is obviously that most XXX% important line lifelines Mainland Macau them Chinese a Macau in with lot I

definition is very is west, the Macau in a like the going be COVID cold part controlling that west; the of controlling In elimination or so risk to not think in the from about And in going this I with Greater it's China almost different to it. flu. Kong. Hong was Asia And always COVID

and way considered too though XXX -- Hong much that had though for Kong mean, I even even Macau China both was cases, Macau. So, a under

down closing drastic Kong the some measures I are has last way. called and the Macau in I as Kong so approach I Hong that look Hong that few Hong Macau having Kong government control how it. to think for risk that they of of terms fourth now those that's wave, isn't portal numbers the reiterated, are coming scientific their at more a why And very in again to is so the the But going think and months And discussions. given taken China

not to Hong the other certainly addresses numbers and come, come. talked started, major which they hopefully people program vaccination will think that I it So, have does David if what the is about, given that apparent outbreaks with Kong again can and is us now any

any longing for people Macau So, change that behavior, entertainment offer. are permanent and excitement to in still there that has isn't

Praveen Choudhary

I That's thanks then point. you that Lawrence and great, agree with on

And to as Evan sorry, greetings well.

So, question question is cash quarter on do. you cash the talk but numbers that the it for OpEx the for even every would The go tell goes negative? third three my would flow And you have second flow does questions. third versus is, number I it volume -- as number quarter, EBITDA reports question Geoff be positive, Manila, from is about maybe us debt bad was company to up not Could assume up? the that’s fourth

bit the you Although explain numbers have Thank why on much. a a the are high sequential, just these high three little been numbers bit look so can last quarters these side, the you, a mean, on on side? I four in

Geoff Davis

Sure.

first, bad one last on the for debts. So, our

to the ground maybe every that's normal of some the can we call that yes, And to have last over provide it's year. we the definitely our in just investors. Macau transparency levels. operating elevated a reflection And know, what you you you from and quarter on As provide just conditions

As very you challenging. been know it's

of begin the XXXX say XXXX. So, to going provision debt I that that normalize bad course and into over we'll would

second your think right? question on OpEx, Macau I was

Praveen Choudhary

Yes.

Geoff Davis

increase the did recently yes, was OpEx that fourth I number provided business with That -- about returned the expect to Lawrence, OpEx million. as volumes to $X.X backdrop was third $X.X the And, the increase volume So, as million. as quarter a by at the to quarter daily continue in returns. would continues into approximately improve, as

back variable into the And system. some costs of driven come those business

Praveen Choudhary

last from then flow cash on question there was you. Manila. And Thank

Geoff Davis

that, property So, the the that the recharges some from you once right cetera. charges et rent net number rental, against Yes, cetera, payments, that property et cash million less slightly number about level get after the after of you're flow is of $XX than Manila, or through breakeven.

Praveen Choudhary

you, Thank so much. Great.

Lawrence Ho

its like minimal. way Yes, all

Praveen Choudhary

Yes, thank you.

Operator

you. Thank

the Goldman Simon go from of question Sachs. next have from ahead. Cheung line We Please,

Simon Cheung

trouble questions. Thanks how wanted One, and given normalization trouble, thing. for restriction I sense the to Hi, get pent-up one a two But Obviously, optimistic question. relief. Lawrence, all taking is demand. everyone. quite you you think my have sounds about the potentially

reassessment of any but to some maybe back what were to be like put demand, the coming gaming question. XX% have then back, demand we the And see the XX% you a or going If that's of a maybe loss number coming pent-up would then in first thanks to lot. given the as the think situations, X? you will the flexibility have Studio also and see well? up the you second current you whether how a on update City the Thank and constructions question any speed Phase about that you, Are having

Lawrence Ho

Yes your Simon, answer first. second let me question

we XXXX So, of slowed so think would down fully of and City been beginning X, then Because have XXXX all. Studio at we market haven't the that the around for that Phase recovered on. do end

think open great timing new so a And that's we a property. to

committed on And government haven't down, the slowed the with given so delay. to COVID the period we development working we're

help anything, it. ours already building seven floors. is the up then, So, we're And with two very if to that happy

the building we'll up of the spend we the XXXX, by bulk XXXX hopefully, the of the so end doing And end will before of setup. interior XXXX all and top

we're So, very front. happy that on

Again, I XXXX year is think the pent-up and be demand. to In on rebuilding pent-up the going recovery. terms a return of of

and people from virus, So, let factors in. Macau COVID enabled also that I the going think a and rush sudden there's of that the don't open to the has success drudging all control and to floodgates China and how

portfolio are come the David as of earlier way, And property. many allowed Dreams in are it the see why not. you you that segregation our doing of of to seeing And own premium sheer as a very within can isn't now, on, how better that's are get is is a And segments we you people really right does divergent; more see it doing that because segments City mentioned as well. high. function mass the Studio than into and of number City doing well, people a Altira medium well So,

So, be the but at market the end should to of levels. by like quarter operating fourth think I XXXX, XXXX do close

segment Of which another is VIP story. course, other than the

Simon Cheung

helpful. insight. that's I the for thank Thanks, Okay, appreciate, you. very

Operator

Thank you.

have our go Shane from the Century. We Please next question [ph] Ng line from ahead. American

Unidentified Analyst

you Hi, thank taking for question. my

to more give Just up GGRs you you. year. heading kind us on into how about follow visitations comments your previous optimism sense of thank Could a of historical the and this circles, annual you're exiting looking at

Lawrence Ho

you do to Geoff, take want that?

Geoff Davis

he year Sure. today he where from a as definitely add. started we last visitation here to GGR year. a are of full ramp the of see meaningfully we ramp of Evan rate up run both course and to that even the if of up we tail sort part continuation this end specific definitely We number is anything has the year, expect for or can anticipate of without over a or towards

believe with So, GGR the ramp that be absolutely and factors of rebuilding as for see we a year, that XXXX the market will up. all discussed, visitation has Lawrence we Melco for and

Unidentified Analyst

Thank you. Got it.

Operator

questions. Thank you. the call like to I to There are hand would Tim. no back further

Timothy Mazik

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

Operator

participating. conference Thank you. that Thank does Ladies you today. gentlemen, the for for conclude and

disconnect all Thank you. may You now.

Melco Resorts & Entertainment Limited (MLCO) 25 Feb 212020 Q4 Earnings call transcript