Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for participating in the Fourth Quarter 2022 Earnings Conference Call of Melco Resorts and Entertainment Limited. [Operator Instructions] Today's conference is being recorded.

I would now like to turn the call over to Ms. Jeanny Kim, Senior Vice President, Group Treasurer of Melco Resorts Entertainment Leader. Please go ahead.

Jeanny Kim

thank XXXX joining earnings and our today operator quarter fourth call. you, you us for for Thank

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

note Before we statements under laws. safe the today's securities may provision federal contain made of that harbor get forward-looking discussion please started,

from could Our results. actual differ results anticipated our

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

Finally, our website. posted that please our on are note slides earnings supplementary Investor Relations

Lawrence With the that, I'll call turn over to Mr. Ho.

Lawrence Ho Yau Lung

Jeanny. of encouraging. XXXX you, Macau highly has properties Thank in The performance far been so our

peak been in performance holding pent-up belief up with in develop EBITDA we average line leisure. Chinese exceeds the year, what is January. international in of as million volume XXXX. our a this and New during Year demand the recent This CO Year we reach New will in Chinese Volume entertainment GGR During that leading recorded saw view daily post February continue mass Year Chinese and a days well for Macau New to X day our continued and our return has and destination supports of

nongaming to next strengths to the I attractions. and on our proposal XX gaming the and award years. to concession believe build the greatly my of our express will would for that Macau we We like the in a in our operate to to appreciation government existing given consideration Macau continue for investment continue proposition appreciate entertainment to

to City Macau best-in-class investment is execute Phase attractions market. commitments Construction We and to continue on Studio to to our are complete. X of bring the facilities excited

largest along to currently the the the stage second first open expected quarter its the third towers quarter. The remainder X water X include which is kind expected targeted Phase of of to Asia. indoor park the be hotel of is in for will which with is The in opening

continued Philippines, volume more junket to travel In for a the are target expect we into and growth with very we of pre-pandemic and Mediterranean we has as City in increased Dreams and future the second GGR the close excited international are exceeded and volumes the of gaming opening activity. Cyprus XXXX. pre-pandemic quarter levels Philippines

With that, I to to of numbers. turn Geoff the through call go over the some

Geoffrey Davis

Laurence. Thanks,

property for EBITDA Our fourth was of million. XXXX $X group-wide approximately quarter the negative

group-wide reflects to property portfolio faced challenges was Our of the for breakeven This resorts. the just we EBITDA despite COVID-related of XXXX that restrictions. benefit our of due year the full all the integrated diversified year above throughout of

unfavorable $X impacted fourth an win million Manila group-wide was at also COD rate $X Luck-adjusted while XXXX A close in one-off rate property to Macau expenses. for around by by million. COD VIP $X EBITDA impacted of at came million, positively negative by Manila affected million. of Cyprus the EBITDA approximately quarter and negatively $XX favorable win COD

in for $X.X OpEx a XQ at $X.X million quarters. XXXX XXXX day, the fourth from in slight day the of in Macau quarter prior from million approximately per came Our with but line increase per per

recall, may XQ X in closures. OpEx our you As of weeks per XXXX casino benefited from day

control visitation returns. to as cost focus continue We on

cash Turning to our and liquidity.

fund concession. fourth was this the accounted Studio concession-related restricted commitments Around this, $XX issued January. end cash million the fully billion close was billion. approximately XX, operations December City, to XXXX, for the on restricted Macau under we hand. by million $X of of $X.X quarter Melco, cash cash required $XXX for the As at the Philippines Of had drawn around the gaming to includes its We of consolidated and the excluding Cyprus, in collateral on released had government. RCF to and guarantees of

full $XXX reduced drawn $XXX loan the repaid XX, leverage by under our Melco an have million December in by January, million International credit amounts XXXX, with XXXX. repaying we In intercompany it Since revolving under our facility. approximately Resorts had Melco drawn

give for XXXX. some Total normally approximately the $XX be expected guidance nonoperating you quarter do, at amortization expected line in of approximately million, first items Corporate on upcoming As depreciation is come expense will to expense $XXX is we to Dreams and around million approximately of million. $XXX capitalized million of Consolidated which interest. to is to $XX to to $XX finance $XXX $XX includes of expense expected interest million lease $X Manila net to and million interest be relating million million City

Q&A. we Operator, to session for Q&A back whenever the commence That you you're ready. Operator, concludes remarks. can prepared the our

Operator

Choi Instructions] [Operator George Citi. The from first question, from

George Choi

Lawrence. of congrats there? for And for question new how first a please solid you City. is you're on sense results. solar the Phase Studio operations And going on on all, many hire probably us First non-gaming is for And gaming would and staff second give this to and question X, my my

have years, that forward? learned anything that going the I you you you regret does what you changed anything you And operation that done, undo? That's lesson COVID was the COVID strategy that there that During in could from wish need.

Lawrence Ho Yau Lung

Lawrence. George, it's

imagined COVID of itself worst fact X long at our with the But positive same we from the I I'll hand me guess have the I'll of David biggest and second time, and could take off years. nightmares, question let was it how you, I'll to COVID then during a thank fundamentally I the take the my first lasted. Kevin -- first has long it last COVID all, it in to spin, it lasting for think mindset first off and the regret never I that, Melco. and Because changed hand question First perhaps question. mean,

Geoff, So we the to are all David management and cost-conscious we senior I during team, the eliminated entire work thanks think good of very COVID. and excesses

EBITDA we anything now, flow-through cash is hope so about we about line meaningful the care and this to hope more have we of company. And We think than the recovery bottom meaningfully and have else. I the to with to flow -- that focus care

one ones of COVID. earlier we culture, seeing terms in the that of were So probably

Of anticipated. the course, years was but didn't to thought be expect longer it market we we had it X certainly than

team that. thinking proud I'm question Studio I'll for that. terms of in headcount off maybe the I think of proud with about City, And first so in your I'm it the hand So -- to of of that the line doing David.

David Sisk

Great. George.

a So getting look, here. terms of done really control of better the work operating and years the our few really leverage we're over proud in of cost place that some last kind we've to much our of

going going about water kind X,XXX W of looking cool Tower The at X bring Phase do City tower, for Epic basically have us for as that approximately people. and our mentioned we quarter FTEs in thing approximately on were for back Macau. less well at with end end Phase for XX% what Looking properties to park is the at indoor X that the we're Studio of the fourth the for Lawrence when to the all XXXX, where we're everything at XXXX open of the is of

to of the So really that line. what a rethinking get more bottom job We're our of we're out business. operate doing and flow leverage going we that And with kind we've done how to again, that get really really the now. we're happy with the the that good much will we're through things of efficient

a us we good story for again, going here, forward think. So

Operator

The JPMorgan. next question, from Joe Greff from

Joseph Greff

you about points the that Lawrence, some gave data encouraging quarter-to-date.

day February drop that. day on January, of much presumably then down forward? little drill Can in bit how EBITDA a off talk going you to versus about some about how there. off, are per you Just drop thinking And per a OpEx

Lawrence Ho Yau Lung

and the period, February, year. New February was look at well, was considering think Year, Chinese in the I January government that January Macau And flat. Chinese effectively January. than had and really the you ICJ if Year that February New Joe, were less today days entire this released XX% And figures

pretty month. So X, the when -- And would out February X. January our a be X quiet. you on just was I look days start, it's ago place Wednesday Usually across And of walked X an when casino you sessions before and I floor at March minutes literally -- mean, night it's take X all buzzing. the that, amazing

volume is and defying are this definitely very seeing so year seasonality. we're And the it's encouraging

per some? want do So but to of if you day. want day think additional terms maybe, -- share Geoff, per the you OpEx then David, OpEx and I And to share in color,

David Sisk

through. we company. rest a think numbers. the terms I and here. had the focused in within We're we said. trying we've Lawrence again, said, that of as I'll it we of said, flow-through cost-conscious, cultural as look can. to I very let to continue to seeing our for to Like -- But possibly year to Jeff look -- us that pay I very And much forward and dividends do continues flow-through we're down change the like I Yes, come bottom as down And the the as as OpEx, on look, get think, much

Geoffrey Davis

This is Geoff.

comes will solid been return COVID. visitors remarks, pre in be highly containment, we back, the is my as focused the and have So cost efficiency return, number million I really, as prepared referenced as $X.X the day of throughout we continue business that per that on a to the the business.

will But the volume-related as cost as here time, number on much the those and savings to efficiency, increase expenses we everybody see is system. bank I think and of focused that savings mandate retain us while forward. going back will as we as be come over permanent into for for those possible

Joseph Greff

have XX% X of through, kind quick your it Geoff, give for trying on then about some When and are if we're a at here? you some revenues me. and just color with about of very comment, mass expenses isolate figure all comparing was be it flow-through then last would you just February at you how flow-through you out performance pre-pandemic, XX%, XX% volumes. looking percentage, to And how follow-ups. Geoff. levels? helpful, what from and respect incremental do But now? put your kind And helpful. gaming at Can can flow That's OpEx incremental all look Obviously, with tax approximation of we that to pre-pandemic the think That's of come you and to back us rate

Geoffrey Davis

directly where Sure. permanent, at percentage That were be we look I'd to right that put pre-COVID where is are of XX%. I'll that try take estimate what to at me we first. to around one, we now per if likely to the day question and

that cost least shift about I of benefit away that's points result those mix of from the at savings. savings as we'll So the in VIP, to have well. have of think the improvement ballpark of when think inevitable the as basis a we'll and we cost in XXX mass towards addition And margin margin

David Sisk

Joe, okay. a little that's the first take I'll with if bit, question you

but midweek about But you it's go future It We're it So the XX% we in to bit here. see expected have the back up. thought. been on would fast the gets weekends, of with about and very you come we as of recovery the and if how a look, go pleased little come forward about that But forward, we again, go as it's we've slower optimistic XXXX. back quarter we're the back. faster back volumes fourth than we picks very it's

So yes, we're very pleased.

Operator

Ricardo question is next Bank. The Luis Vargas from Deutsche from

Ricardo Chinchilla

if junket you could have VIP I That saw you you is from market And Chinese during on, whatever the guys into was business there what guys very on that comment would business? based with experience color and be is component the period, of VIP seen wondering premium today. please mass in your a Year direct there migration any helpful. New

Lawrence Ho Yau Lung

But quarter I'll the hand what business. date. And into even continued premium market that I the always direct anything, premium direct Maybe they VIP leadership during it seen pre-pandemic line off we of question. business. terms the think seen we junket and in years, were David. with days, of for the and is junket have have -- leader have have business, dovetail this Melco, to we undisputed kind the in Year for during we over to the What is Chinese New if the we Thanks

premium to So program. what we have our that moved play some direct junket seen is

on can more to junket but mass less think so color. David maybe premium I add

David Sisk

come back on ago us of some trying in hard in those a I XXXX. business. some a junket down made business, to that's And we've team to the our premium really direct kind concerted start really paid players of as that think recovery paid for dividends effort to XXXX a years And that. We bigger of into has few move worked

that but January already. throughout Additionally, during also well our premium February the New return only March we've saw and we we've that to play do tonight. that not Kong from that now direct in of seen And seeing period but there seen Asia lot as that even Year up we Hong a and as not see Southeast only Chinese continues we're

in of doesn't play direct. as the that coming much to of from quite back play that through of we ago impacted have a really efforts us junket that had because more again, migrate to over few terms seem to So the years trying premium

that that, to we So again, and play. think and in leadership will our premium maintain a is market able us continue story we'll direct for be position good

Ricardo Chinchilla

That's you discussion. of restricted both the -- with capital have and the could Macanese wondering XXXX, for the if Perfect. realized and color. might maybe you authorities expenditures Chinese was for commitment on in that the outside great into concession I restricted the the remaining authorities of with year your renewal group given the the group comment

Lawrence Ho Yau Lung

you take Geoff, want to that? do

Geoffrey Davis

Sure.

USD approximately So to XX to in Cyprus million. in USD million XXXX, expected XX the spend is be,

Phase to of City that we've top maintenance of $XXX to And million $XXX X, estimate million. got of For $XX Studio the $XX be we million. that million to on remainder

Operator

The Stanley. Choudhary next from from Praveen question Morgan

Praveen Choudhary

focused Geoff, mass I'm question. quick very business. the on

tables to the look City wanted but a future, you've Phase you are X the few new lost with then I Just in a concession. of if rooms Studio in understand lot adding

have For tables. other gained the of example, some competitors some

table, rooms interplay just less rooms more share tables, play how of case, your your this versus level? market in pre-COVID So versus does in to new it but

Lawrence Ho Yau Lung

is Lawrence. this Praveen,

exactly according got requested number So tables the we investment that proposal. to of we our

longer Altera, XXX Studio on XXX -- the tables it but no tables. day, of the all Dreams, hard didn't we like tables. the have of tables our be at to were junkets. in XXX those is the didn't necessary to there, City mass And So we would feel at those floor. concession, end given the City we junket within given to market jam-pack of minds, tables pre the really lose the -- XXX And had And of to day, before new that and between end

we've think a that model with X going now. underappreciated. right opening, anything, So was relaunch I And property. felt good always I it's if Phase that think City City anything, have completely we to If Studio Studio

the now indoor to even few over last the retail a new during with be water of to redid COVID, and new the So we've, even reposition years, we the positioning, park lot more with mass-focused. property the

rooms have have there we feel and there. tables good of about think the I number very of the number we we

Praveen Choudhary

Very helpful.

know will any liquidity to not question be for was term? The other condition be the in any are Is it we to of any related such running to flow-positive. believe free the to near soon delever EBITDA-positive I assume the cash equity offering and company. now kind or should thing fair that reason there

Lawrence Ho Yau Lung

all first go debt. regret was in order let we of COVID. biggest took of had Praveen, on the number regret X I today COVID, to to support a one didn't continue we of during staff -- the of locals was to questions and think we of and any I our lot our focus, of the years course, what was And X the think

years of debt. X next really the So the X, for pay I X and company delever to down is objective the think number

business now options we to the there's all the think way. our the no continuous I think I company, of I trajectory the -- a that don't see, open. see as equity given expect right at always an we and offering growth time, same But the keep on of

Praveen Choudhary

last number? could of question have February? XX% And the of running I you were that just asked. suggest I level other was If January. about obviously. helpful. missed we business, last very that's given in it. business, question. February, it No, I'm may also I said, Have which that's The talking Is to think at that Yes. XXXX similar mass mass to some Yes. my possible end you XX%, have with peers

David Sisk

XXXX. it's we're we Praveen, back David. were Said of in that about of the where XX% quarter fourth

As I it softer on we on up midweek but the here goes rise. said, it weekends a see gets and it nicely to continue little

as we we're said, I here. into like future the optimistic So very head

Praveen Choudhary

Excellent.

Sorry, in us. things missed the of I again, good Did congratulations; for roll and I are hope improving. -- may all have times that.

Operator

Ms. back I conference Kim ma'am. hand There at for go are ahead, to the would further remarks. closing Please moment. questions the no Jeanny

Jeanny Kim

look for our operator you to in speaking and call to thank you, next forward Thank you, you. We quarter. everyone, participating Thank today.

Operator

conference today. the participating. concludes for you Thank for This

all may You disconnect.

Melco Resorts & Entertainment Limited (MLCO) 1 Mar 232022 Q4 Earnings call transcript