• Adjusted Property EBITDA: Approximately $323 million for Q3 2024, a 7% increase compared to Q2.
• Operational Expenditure (OpEx) in Macau: Approximately $2.9 million per day, excluding Studio City residency concerts.
• Liquidity Position: $1.2 billion of consolidated cash on hand as of September 30, 2024, with over $3 billion in available liquidity.
• Total Debt: Declined by approximately $60 million in Q3 2024.
• ADS Repurchases: 20.7 million ADSs repurchased for approximately $12 million, with 17.7 million cancelled.
• Depreciation and Amortization Expense Guidance: Expected to be approximately $135 million to $140 million for Q4 2024.
• Corporate Expense Guidance: Expected to be approximately $20 million for Q4 2024.
• Net Interest Expense Guidance: Expected to be approximately $120 million to $125 million for Q4 2024.

• Warning! GuruFocus has detected 6 Warning Signs with MLCO.

Release Date: November 05, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Melco Resorts and Entertainment Ltd (NASDAQ:MLCO) reported a 7% increase in group-wide adjusted property EBITDA for the third quarter of 2024, reaching approximately $323 million.
• The company launched a revamped loyalty program, including the Signature Club, which is showing benefits in player reinvestment efficiency.
• Melco Resorts and Entertainment Ltd (NASDAQ:MLCO) opened new themed slot areas and enhanced accessibility at its properties, which are expected to drive increased visitation.
• The liquidity position of Melco Resorts and Entertainment Ltd (NASDAQ:MLCO) remains robust with approximately $1.2 billion of consolidated cash on hand and over $3 billion in available liquidity.
• The company successfully repurchased 20.7 million ADSs for approximately $12 million, reflecting confidence in its valuation and financial health.

Negative Points

• City of Dreams Mediterranean and satellite casinos in Cyprus continue to face challenges due to ongoing regional conflicts.
• Despite improvements, the promotional environment remains intense, which could impact profitability.
• Melco Resorts and Entertainment Ltd (NASDAQ:MLCO) is prioritizing debt reduction over dividend payments, with no specific timeline for resumption.
• The company is operating with fewer hotel rooms and tables compared to 2019, which may limit its ability to regain market share quickly.
• Operational expenses in Macau are expected to increase, with daily OpEx potentially reaching $3.0 million by the end of the year.

Q & A Highlights

Q: Can you provide insights on your performance during Golden Week and any plans for resuming dividends? A: Lawrence Ho, Chairman and CEO, stated that October was strong, with a significant increase in mass drop during Golden Week. The company is focused on debt reduction but aims to resume dividends potentially in the second half of next year, depending on business conditions.

Q: What is your current view on the promotional environment in Macau? A: Lawrence Ho noted that the peak promotional intensity has passed, and the market is becoming more rational. The focus remains on EBITDA, and the company hopes to improve its EBITDA margin as the promotional environment stabilizes.

Q: What are your thoughts on share repurchases versus dividends given current share prices? A: Lawrence Ho mentioned that while the recent share buyback was opportunistic due to dislocated share prices, the company will remain open to share repurchases if similar opportunities arise. However, there is no plan for a programmatic share repurchase.

Q: Are you seeing any impact from pressure on luxury spending by Chinese consumers on your premium mass customers? A: Lawrence Ho observed that post-COVID, Chinese consumers are more focused on experiences rather than luxury goods. Despite challenges in luxury retail, travel and experiences in Macau remain strong, supported by various attractions and events.

Q: Could you provide guidance on CapEx for the rest of the year and preliminary plans for next year? A: Geoffrey Davis, CFO, stated that fourth-quarter CapEx is expected to be approximately $115 million, with around $400 million planned for 2025. Of this, $70 million to $75 million will be allocated to Sri Lanka.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.