Melco posts third quarter results, sees revenue down 46%

The leading developer, owner and operator of integrated resorts in Asia and Europe, Melco Resorts & Entertainment Limited, released a trading update on Wednesday this week. The company announced its unaudited financial results outlining its performance in Q3, 2022.

In some parts of the world, the COVID-pandemic no longer impacts the daily life of people. But this was not the case for China and Macau which implemented COVID-related restrictions this summer, as well as mandatory closures. The closures and different COVID-related restrictions impacted Melco's revenue in the third quarter.

The company reported operating revenue of $241.8 million during the third quarter of this year. This marked a staggering decrease of approximately 46% when compared to the $446.4 million reported for the same period last year. Furthermore, Melco reported a negative Adjusted Property EBITDA of $34.9 million in Q3, 2022. This marked another decrease when compared to the $31.9 million in Adjusted Property EBITDA reported for the third quarter last year. Operating loss for Q3, 2021 was $182.2 million. In contrast, this year, the operating loss increased hitting $198.5 million.

A breakdown provided by Melco reveals revenue decline within different operating segments. The company's City of Dreams revenue in Q3 this year plummeted to $66.4 million. In contrast, for the same period in 2021, the revenues at City of Dreams hit $252.0 million.

Similarly, the company's Altira Macau operations reported a decrease in revenue for the third quarter this year. In Q3 2021, Altira Macau's operating revenue was $10.2 million, while this year, it halted at $2.4 million. Studio City's operating revenue in Q3 this year decreased as well. In Q3, 2021, Studio City's revenue hit $81.8 million, while this year, it halted at $25.6 million.

Lawrence Ho, Melco's Chairman and Chief Executive Officer, commented on the topic in a statement. He said: "Our results for the third quarter of 2022 were impacted by the casino closures in July and the travel restrictions imposed across mainland China and Macau."

He explained that the government in Macau implemented measures against the spread of COVID in July, which closed Melco's casinos for 12 days. Moreover, Ho acknowledged that upon reopening, travel restrictions remained in place contributing toward a challenging operating environment.

Still, the company's CEO added: "we are encouraged by the recent re-opening of Macau to international tourists from designated countries as well as the increase in visitation over the October Golden Week." Focusing on the outlook for the future, Ho predicted that Melco remains cautiously optimistic that e-visas and group visas can help increase visitation and revenue as well.

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