MLCO - Earnings call transcript Q1 2021 | Melco Resorts & Entertainment Limited

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for participating in the First Quarter 2021 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 is being recorded. I would now like to turn the call over to Mr. Investor of Director Yuen, Relations. Robin Please go ahead.

Robin Yuen

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

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

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

Our actual results. results could anticipated differ from our

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

website. Finally, Ho. slides please the note are posted that Mr. that, our supplementary on earnings our I investor With to turn now will call over relations

Lawrence Ho

you, Thank Robin.

continued During experience levels. recovery a the gradual business quarter, first integrated resorts to in our

ongoing we property quarter saw positive our the another fourth improvement. XXXX, global and Similar environment we table team Macau outlined provided broader factor we While government’s a which have of COVID sequential their have contributed safe Macau which have Mainland and Macau operation operations. COVID times integrated in the the and of the games guidelines efficiency measured the reopening locally and cases all pandemic over In Chinese any the increase Macau, for Macau following the approach continue from of to majority been and cases resort for key EBITDA reported world, Macau the the transmitted in our by overall recovery both operations benefited the and a the global addressing border Macau guests not mass quarter our from EBITDA government, members. of our our had the towards persist year in the in has vast to economy. industry throughout

rebound we the While and which of we the priority. of Melco’s faster optimistic well-being direct growth both colleagues, expect safety ensuring Macau volumes in Macau, communities benefit continue resorts. to customers in and in in integrated remains We business about the and remain and the portfolio operate a premium luxury to our and continue a our our will in highest improvements recovery premium which mass faster segments, see

hospitality closed our resorts starting run of March COVID first first Business Dreams majority on property Philippines improve the or for running the mid-to-late April to in authorized earnings closed Manila were in current the of has the demand through trends our pent-up are basis gaming the mentioned last for operations expectation by currently call, end most benefits March positive in of in dry continue see of City Manila due late integrated materialized. to remain XXXX. planned limited all quarter Unfortunately, on PAGCOR and to a As to our generated EBITDA as quarter. with the concerns and of

domestic return a While Xst, which XXXX quarter. This quarter casinos increasing there an of place cases far remained closure and at first December into quarter. demand has second XXXX, announce XXth gaming full our lockdown of fourth the in November resulted to of Cyprus led a closure was swift from in thus number COVID Cyprus a partial the the throughout from a government casinos half the the in of during second second of and

to the program. current remains will be Our understanding the May committed other along on is Melco reopening its sectors global that pandemic, development with global date Despite to tentative casinos X.

continues reduce spaces water XXX end count City's our premium with and will closed luxury an increase our non-gaming the all more at In Studio to transform fully project Also outlets edge Phase continue Gaming three indoor/outdoor also mass space the Studio competitive the and and X in countdown launch of will Nuwa a Mediterranean of of and hotel family we restaurants, suites. Phase City the leading world's major in fine-dining expanded the park,. progress. of a tower targeted luxury upgrade Dreams MICE On with XXX,XXX with year, a will outdoor amphitheater, offering property segment hotel than where of To feet Cineplex, and completion, strengthen renovated in square the development next is by X this of at including down MICE section strengthen Macau’s park, fine-dining Europe's attractions position it state-of-the-art and at in Our renovation its largest Dreams Macau adventure approximately hotel completion, be space, Macau, City entertainment approximately Upon variety rooms where of reopened hotel retail. XX% end towers inventory of works where XXnd XXX March as the our the reopening March. added will two May be key expansion into of After outdoor room Cyprus, new product will City an be largest XXXX. City a the with the ongoing. one construction resort new the further will integrated is Studio park. luxury rooms for approximately the water of

continue pursue market. Turning the to IR remain bringing committed a and opportunities Japan, we to world-leading to there within

potential with are We multiple engaged partners. currently

forward Japan. maintain gaming Japan IR terms and in new travel, COVID and to to has patient of development potential remain to continue to challenges the we of disciplined market with represents approach continues move globally. We aspects continued in best remain convinced process and our including all While timing respect Japan present in that activities

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

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

Geoff Davis

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

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

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

Operator

your line question. [Operator Joe Instructions] ask question comes JP Your Morgan. from first Please of Greff the of

Joe Greff

a see where this – question. then, how kind of and Do Thank guys. incremental of far you so a of would reopening at to path terms can from an taking tough optimistic year? Had recovery a mentioned tone that And the out levels quarter table you plays of sense thought optimism that you you us those ago, Week and next more seen levels was those think a tone change also at games it you And what ago that waned evening, Holiday this the in a my you. to with – of you in all Lawrence, mass April? a consistent your by end be thought still and not gets for a the year notice to Good XXXX. Golden give through you’ve market you month? quarter you at end

Lawrence Ho

Joe. Hi,

my David view to quarter. details the more ask I don’t generally, remains why same from give last but later on, the So,

of last I as parts the of very the it the the well months saw some in on got the and COVID we recovery first that. quickly about really quarter control. issues think of it beginning they’ve under So, and China of beginning we March call, has In couple year, the talked in northern

are the so, May a and what terms Golden are Week. booking we’ve as did start we forward very rebound March, seen – in seeing of we we by encouraged for of And the

going is, is sustain to key I the during holidays. will it blip the it be going think just a or forward

judging is cases a of our They X.X people China particular So, on going back the a in I COVID that luxury best from that in billion comes China. country any life to goods luxury – at confidence especially and for the normal in China, consumption is fact day are with retail think from single-digits had people. number within

and we are – that, we that it gradual is said recovery. encouraged a So, all having still by

haven’t COVID. in cases travel had after Macau transmitted Macau. is to regards single and so the China to with tolerance is be in over a people locally to COVID, really right really It’s zero to Asia COVID getting So issue in with there a able because And Macau particular, year. not now all much a

just so, people can it’s when freely. And travel

So, maybe provide that, I more – think color. can David add on

David Sisk

But XXXX, giving New Year the for us look period good outcome say. the just May the And you to the for the we few in a kind of the relation track Golden if the after Golden very working the those in cost are Geoff. at significant is, XXXX, a ahead confidence opened since COVID a crisis if look Hi if Chinese that. Week this will Week. of I is Thanks, at have things things at Lawrence. Golden three at you of feeling period. resorts you Year Western and of New for Hey, look to kind think are cut October we’ve areas, we of in that one let’s which XXXX be Week of with for the essentially we Three tracking about lot for again our will do

running Golden the are we but gap May If we the we to – little there, back forward bit are we XXXX, I we behind for in behind little will I continue think certain – a you go gap here. said, as feel pretty as close Week to we close strongly still we I will where bit the But work are think move we players. that

I where up we before. up were we’ll end playing think to

up, as hold long More okay. will be we though, as think importantly I we would

to have we customers provinces the may our bit much trouble who get too come. but too they have half get of the of maybe little seen some that yet, will from a often, become We one shouldn’t one work kind of – do disease with we work

recovery we as Week. call, holds for to that we the as to obviously relation said would meeting So, we on little that. we from – we time holiday. It’s head seeing, over bit off we very, feel and March, really lot saw up April, as have In But a weeks. of quite couple long going People Easter strong are strong April with Golden was a the the of again some what ancestors. May the think seen bit us. last picked of We I last are as very start of think in very a we up, confident. a indicator into their that’s of kind terms

I I starting particularly rest think towards confident the out fairly mass we long year, the look are to that is the hopefully of of we XXXX the recovery As up with be in side end market quarter back that XXXX. that where those said, quarter in let’s we the to say fourth levels we by the on fourth showing the will were, of XXXX

Joe Greff

Thank guys. you very much for thoughts your

Operator

question America. Billy Please from comes line of of from the next question. Your ask Ng your Bank

Billy Ng

Thanks. Good evening questions. my and for I as questions two taking thanks have well.

like bit. is, down I the to recently, The like that [Indiscernible] first the continue visitation a we improve question number but slow think noticed improvements

main bubble mix some of more the then high your hours have hours? think Macau. there want mix Macau to mix does months? on to opinion next How seen just and about dry in type I of maybe some customer second of the will in think this the of change be you wonder what question, you And between customer or end So connection trouble What’s type how Have the in premium regular premium with creating Kong properties some my and or ask Kong few view your that from Hong your my seen terms and stage recovery. mentioned in and That’s of just first hours likely Hong Chief that? guys of Executive you question. compare in Lawrence I

Lawrence Ho

the answer then first can the us and question David Hey for answer Billy. Why question. I don’t second

Kong for our of China by Hong the and the of travel great good is Kong, always is zero has early because terms to because XX%, always corridor, rightfully to and is would XX% China, similar business most a Macau to very tolerance Macau. way has with so, policy Hong has Macau, a But market be that it it Macau be China. as cases. Macau traditionally really in happened been COVID In business I in one. firmly And mentioned a on, far China going regards – important And Southern

Macau travel think right with Kong have what balance to have corridor not I So, jeopardizing China Hong they would now. with the

then ten about they revised locally for think I think I of – cases so, that any that if thinking talked unknown and origins. And weren’t transmitted previously had two there was with was to weeks, kind than consecutive the less they zero

Executive news So at – but Chief I Hong the with Executive as last heard, I read met well the Macau the that in Chief Kong the week Boao Forum.

that China So hopefully, part they if something corridor. they bring of are as together with out

I or they optimistic the now. COVID are worst call the of the relatively whatever and So, Kong in and talking is wave with leaders fourth hopefully fifth control Hong discussing something or think I a wave under outbreak am that if also

thing for So, XX% a huge that business. would us, be our XX%, again, of

you if first So, maybe David can answer question? the

David Sisk

Sure.

look do up tale high recovery is let’s or visitation to they translate is continues a the it’s more them luxury the Studio as mass kind drive mass end be a Dreams on level vaccine that, in past. The end of what mass much to those, also quite that plus seen So, us and mass call customers point. the end from not of sense and for sales of City to here the a as again, players high players template you have two in is the playing as mass of if high a Billy premium well. strongly bit of your seem side City retail our and we’ve for sales from into that little the lot mainly Ng, cities the

maybe them plus bit of The out. different mass it’s the a that a more maybe call think now. to a premium play in right to well mass looking – or function still these playing coming mass of players customer of just I are players be very the – let’s

bit. playing Let’s a down with that call it is grind mean, I that that call little if you mass

think we since a significantly. we be kind of through things the Golden sense I Week of will will obviously that get here want to better – up

kind So it that now. right sits of is where

Billy Ng

Thanks. helpful. very That’s lot. a Thanks

Operator

of the line comes next your of George from Please Your ask question question. Choi Citigroup.

George Choi

you very much. Thank

a So I’ve of got questions. couple

remember way if any in Would they particular And in based see mass or keep February, changes competitors the amount I is my just best are any one. items the please fourth birth of quarter, your the you you And the quarter? are tell during in specifically opening? remember your market Firstly, gained in there then would - and last question first past I one-of after the a premium I lost wonder assume you estimate mass that housekeeping right? platform in and in on please share premium in the if do you there during us the is year you. second us done quarter was quarter Thank recurred first was new what

Lawrence Ho

Hey, And David, one? Geoff the first second the do take you want to I take guess, one? would

David Sisk

Great.

you George, nice once at there to two and February. stands for got us. So, in out take year a a if I back it’s It one the look chance others

they’ve think It’s property. seen highly like It’s impact. it’s nice. a job. We’ve – much done I nice of an a seen not

– as in side there of But are speak. so that we given lot have think an to any the you of just and draw opportunity, are the Dreams impact our from seen that City proximity bring there more so to an saw we of far. over that’s with players impact hopeful them suite those I players to not wonder a is our

during the more looking thought so like not we’ve seems share. It been in kind we’ve I of don’t share any would – I this numbers that are grown have period. COVID we’ve think I of than anything. think we’ve a bit premium mass Our at. terms – little mass premium lost It’s where we of grown our

be to for strong seems very and very just it us. good So

Geoff Davis

Okay. Hi, And the second I’ll George. take question.

So, about of bonus million. provision. had no In of XXXX, And quarter reversal you management are correct. $XX of normal a course no a the we bonus fourth accrual of bonus,

just accrual one-time of that a hit in So quarter – the had XQ. quarter. than then, XXXX, and $XX in we first that, the first bonus this reversal charges the more normal material Other million no

George Choi

That’s you. clear. Thank much. very Thanks very

Geoff Davis

Thanks, George.

Operator

of comes Stanley. question. Morgan Praveen question your the line from of next Please Your Choudhary ask

Praveen Choudhary

question. Thanks Evan. My here. Hi David. for two, Hi my taking Hey Lawrence. very questions Hey question – much three Geoff.

to Can compare housekeeping QX mostly what questions. And QX in what could Is is you Is show, OpEx is Macau this know or end for bad last start people in debt the First it’s negative not about and we are quarter-over-quarter Geoff, that which Macau bad it the bad – showing debt visa you it once up first Last us can one the the talk year, is, the to XX these off and time? you how and is not let bigger. explanation of Hong provision seems impediment year-over-year? at normalization? and it automatic, anything like The Lawrence not can dropping there opening was the biggest opening, got provisions OpEx provisions. see the so the much. full is does one, Kong coming point question at at no talk been you test related things it have Thank about much it the to second manual? so we you points. debt that

Lawrence Ho

Praveen. Hey, hi,

impediment people e-visa think of do Macau I So, to above anything. coming biggest the is

you do test lot a of passport you to going together a world time, to soon, those annoying of unless part with city, that’s going have wherever be vaccine but the just to at PCR travel life to to country the anytime come are people, comes up tests. for city is Of course, and the from country, same

more main Hong I of really come Macau do well think that I people think is to I impact. Kong, and Macau about well how Macau. Hong in seeing And Kong, is controlled is in China. a am the as Macau, I as differently nowadays, think So I think which considering one COVID Macau do to bucket people really COVID Hong and anything, during past Kong e-visa, But aligned look they the has Macau politically at talked when divergence

above think Retail I levels Macau probably close about one very XXXX to is probably why has so, retail. at XX on And It’s the call going spot XXXX that’s very reason level. well. in – It’s this haven’t bright soon. probably to spoken we done be

some are that go mix customer to so, of they Macau, shopping before seeing And that well. doing to as to those where goods, buy used Hong and are you Kong they in

e-visa I second impact that comfortable to once terms will think, think Macau, and I have and freely business. visitation with in people more in uptick is Geoff, question? the to sorted I a for you a of travel huge China again out terms So, for is massive take us want the of guess,

Geoff Davis

Okay. Thanks, Lawrence.

on back fourth XXXX, your about question, day we as of quarter at business about first call, on about OpEx ratably. that only, third your on Praveen, come to and million that that fourth we the So, to OpEx correct. $X.X quarter then, for is foreshadowed We a are in provision, the million question $X.X Macau were you also the quarter, And the would in the comes start has on increased back. anticipated

are to We normal level. provision a getting more

about of of provision $XX million a fourth quarter in first took in from quarter and the that’s XXXX. down $XX So, million the we XXXX,

Praveen Choudhary

Thank the you. luck holidays. with you so May Lawrence, much. And good Thank Geoff and

Lawrence Ho

Thanks, Praveen.

Operator

line comes Cheung of question Simon ask Please Your your next Goldman of question. from Sachs. the

Simon Cheung

as Thanks for everyone. taking the question and my Hi thanks well. presentation for

So, two I questions. have

VIP screw the that’s recovery here, the impact to continued been VIP on up the pace weak the we numbers, the and Just for premium at that have again, be of mass. remain a looking number be quite which obviously to

VIP and be premium of to it’s whether mass? from think That’s think first Just longer decoupling potential wondering premium in how on going to mass do negative the some question. you the further VIP the impact run? you that about And up the the

to Thank your can on you one, – second The you if number to properties with us - you. share can? visitation on Macau the

Lawrence Ho

the David. with off I question then off it Simon, hand start first to Hey, don’t why and

– the view wasn’t the on our of true has years So, from And and VIP even sustainable. market changed. out ten be ago has that factors was played really business VIP I think our that to view fundamentally number a

I So, XXXX side part shift mass, might of and think the VIP was even the within impact VIP’s do a what to I going the it? at premium to to things. business, it it more direct of But you in is that David, premium the terms on be not think in junket of shot of want take business

David Sisk

think Simon, mass a how Sure. I of like our of the did just growth bit and VIP changes had our premium so and an customers anything look mass impact premium just on our the in at in they things. else

I via probably kind to this time junkets premium to mass of think more doing from over more. like now the they’ve and VIP switched

we down we beginning. impact probably we an what in it’s asked, I on relation I a visitation you have fourth to to the a XXXX. go thought In have approximate were in just much think of of So, the are which think an the of basis bit impact seeing to XX% quarter don’t question for going may us. XX% forward we

Simon Cheung

number slightly entire ahead the visitation visitations? of So tracking actually your is Macau

David Sisk

we Our what to up we XXXX. of in we quarter talked is have fourth seen percent the ended would the visitations, what coming XX-ish property,

Simon Cheung

Understood.

David Sisk

we am different, again, little visitation sure a not that counting So as system. Simon, I think I people bit the was said, again,

am I it So, let’s the completely someone to visitation different Macau few comes numbers. the say times we if a not not correlates, think number sure accurate – if a to through it’s completely

Simon Cheung

helpful. lot. are Thanks a Thanks Those Understood. Understood. guys.

Operator

Angus Your question your the Please next UBS. question. of from Chan comes of line ask

Angus Chan

Good Hi there. evening.

Just a for quick Lawrence. question

think COVID metrics before stable, be of used of e-visa, think kind With Thanks. resume they are authorities quite you been what for waiting the are potential at? resumption can has our you what do visa? Obviously, looking the they

Lawrence Ho

a go I China the to has that’s Angus. a guess, back I I Hey, for point guess, billion zero question. that, dollar COVID. tolerance really would

And a think Kong other at part but regions when Hong Kong, of And sometimes if back and channel the Kong bit so, are still U.S. hand, get I into they somebody the on Macau that COVID are they border. technically outside potentially varying technically, and corridor, strains the China, it’s Macau one see was considered China, the special China. on look at people there went hand, administrative Macau and if Hong the into can people and travel and with because to a concerned. of still And Canada Hong a from

the suffered China, that The fact in population vaccine cities had as been given Hong as the from the So, relatively but twelve a enthusiasm as the from ongoing, Macau and and safe country countries high large COVID other and and months. Kong is in hasn’t been COVID. that vaccine rollout hard China stayed have last really

to So, things I people for would staff why colleagues will say, go normal. a unless we reach us, the themselves, protect our that’s the immunity, favor get of it’s future never we really encourage their and a families getting and humanity and vaccine, and protect to vaccine matter hopefully well, back also protect more as highly our customers in herd the and world do the because

suspect e-visas. resuming So travel China’s terms full of that a little hesitation probably in bit is full I on through and

Angus Chan

Thanks.

Operator

conference Yuen for are Please There the to like remarks. Mr. time. questions no hand now to ahead. I closing this go the further back would at

Robin Yuen

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

Lawrence Ho

Thank you.

Operator

This concludes you today’s participating. conference call. Thank for

You may now disconnect.

Melco Resorts & Entertainment Limited (MLCO) 28 Apr 212021 Q1 Earnings call transcript