Melco continues to experience hardships in Q2 2022

NASDAQ-listed entertainment and hospitality company Melco Resorts & Entertainment Limited is feeling the economic pinch. Several factors have contributed to the company’s present predicament with the unaudited second-quarter resorts revealing another slide in revenues to $296.1m, down 48% from the same period in Q2 2021. The company posted revenues of $566.4m last year, but it has now been battling on several fronts.

Global inflation has suppressed consumers’ purchasing power and a lingering COVID-19, or the fear thereof has disrupted traveling opportunities. While tourists have been coming back to gambling hubs, they have not necessarily been coming to some of Melco’s key places of business. China’s zero COVID-19 policy seems increasingly inefficient when factoring in economic stagnation, adding to the woes that Melco has faced over the past months.

Border restrictions between Macau and mainland China remain and this has resulted in an operating loss of $209.2m for the second quarter of the year. This was up from the $128.1m posted in the second quarter of 2021. The net loss attributable to Melco in Q2 2022 stood at $251.5m or $0.53 per ADS, the company noted in the official investor notice.

The challenges and performance slump have been all addressed by the company’s Chairman and Chief Executive Officer, Lawrence Ho. Ho acknowledged that the cross-border restrictions and the COVID-19 pandemic had been chief disruptors during the quarter. With this said, Ho acknowledged that Melco Resorts will continue prioritizing the health of guests and team members.

There were some positive developments, too, though, the executive noted, such as the swift response by Macau’s government in charting new concession tenders and the rules that will guide the entire process. Melco Resorts & Entertainment Ltd remains on track to complete the necessary paperwork and sees itself remaining a fixture in the special administrative region for the next ten years as a result.

Elsewhere, business for Melco has been picking up – all the more reason to diversify beyond Macau, too. Operations in Cyprus and the Philippines have been doing well and edging very close to pre-pandemic levels. Since March 1, 2022, the City of Dreams Manila in the Philippines, has been running at 100% of capacity.

In the meantime, the company reported progress on Studio City Phase 2 in Cyprus as the overall footfall at casino properties around the globe has picked up. "Lastly, we remain steadfast in our efforts in environmental sustainability with a focus on energy and waste reduction," Ho noted. The company remains committed to tackling environmental objectives and achieving long-term sustainability on all levels of business.

In Cyprus, Melco Resorts set out on an even more ambitious task after it obtained a Responsible Gambling accreditation back in December 2021, reflecting the company’s overall commitment to ensuring consumers are always protected.

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