Home NewsCasino Melco’s net profits return as Macau recoveries drive revenue growth in Q1

Melco’s net profits return as Macau recoveries drive revenue growth in Q1

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Melco Resorts & Entertainment returned to a net profit in Q1 as ongoing recovery in Macau helped push group revenue up 55.2% year-on-year to $1.11bn (PS887.2m/EUR1.04bn).

Macau is recovering since it reopened in January last year, when the remaining measures against pandemics were removed. Melco cited this as the primary reason for full-year growth 2023. This carried over to Q1.

Melco’s Q1 analysis shows improvements across all segments of gaming and non-gaming. It says that the continued improvement in Macau tourism during this period was responsible for much of it.

The reopening resulted in higher revenue across all segments, and this was reflected by the improved performance of all properties.

Lawrence Ho, Chairman and CEO of Melco says that the company wants to maintain this momentum into Q2 as well as beyond. In order to achieve these goals, he cited a change in management including David Sisk’s resignation as Macau chief operating officer and the restructuring of Melco’s sales force.

Ho stated, “We’ve had a busy year thus far.” Our improved results for March and April are a reflection of the marketing campaigns we implemented, and the business that we generated after the change in management in late February.

We continue to provide our customers with the most premium experience in Macau, and we lead the market for all of our businesses.

Casino revenue nears $1.00bn in Q1

Melco’s Q1 results show that casino revenue was the company’s main source of income. Casino revenue for the quarter ending 31 March was $913.3m. This is up by 63.4% on a year-on-year basis.

Food and beverage revenues grew 79.6%, to $66.1m. Rooms revenue also increased by 72.0%. Entertainment, retail, and other revenues grew by 45.3% to $32.1m.

Revenues from City of Dreams Macau were 53.8% more at $550.9m. The performance was improved in both gaming and non-gaming segments.

Studio City revenue, which is also located in Macau followed a similar pattern of growth to City of Dreams. Altira Macau’s revenue grew 43.7%, to $34.2m. Mocha revenue and other operation revenue grew 6.3%, to $31.9m.

City of Dreams Manila, located in Manila’s capital city of the Philippines, saw its revenue drop 17.0% from $110.7m to $100.7m. Melco attributed this to a weaker performance in its rolling chips segment.

Revenue from the European segment, which includes three Melco satellite casinos in Cyprus that are operated in partnership with City of Dreams Mediterranean, grew by 88.5% and reached $52.4m.

Ho stated that “City of Dreams Manila has shown solid results for the mass market segment, but the VIP segment was affected by the luck factor,” he said.

City of Dreams Mediterranean, and its satellite casinos on Cyprus showed positive cash flows in the first quarter in spite of the ongoing conflicts in the area. “We are cautiously confident that our business can grow into the summer season, which is traditionally strong.”

Melco returns to profitability despite increased costs

Operating costs increased by 37.8% to $987.1m. Costs were higher in several areas, including the casino (609.5m), general and administration ($127.0m) as well as depreciation ($131.8m).

In Q1, non-operating costs were up 17.2% to $121.1m. The revenue increase was so significant that the Q1 profit before tax was $4m compared to last year’s loss of $102.9m.

Melco has paid tax of $3.7 million but it also received $14.6 million in profits from non-controlling interest. Net profit was $15.2m for the third quarter, as opposed to a loss of $81.3m in 2023.

The adjusted EBITDA of the property sector for Q1 was EUR298.8m. This is a 56.6% increase over last year.

Ho stated that he was “extremely optimistic” about the growth of Macau’s gaming, entertainment, and leisure industry. He added: “We expect to continue our leadership with our outstanding portfolio of products.”

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