Melco Resorts & Entertainment (MLCO) Q2 2024 earnings summary

Executive summary

• Total operating revenues rose 22% year-over-year to $1.16 billion in Q2 2024, driven by mass market and non-gaming recovery in Macau and supported by strategic investments in property enhancements and staff.

• Adjusted Property EBITDA increased to $303 million, up 13.3% year-over-year, with net income of $21.4 million, reversing a net loss from the prior year.

• City of Dreams Manila delivered solid results despite headwinds, while Cyprus properties saw over 30% quarter-over-quarter EBITDA growth.

• City of Dreams Sri Lanka is on track to open in Q4 2024, with casino operations targeted for mid-2025.

• Recognized for sustainability achievements and industry-leading ESG initiatives, with ambitious goals for carbon-neutral and zero-waste resorts by 2030.

Financial highlights

• Group-wide adjusted property EBITDA for Q2 2024 was approximately $303 million, with Adjusted EBITDA at $284 million.

• Gaming revenue grew 22.7% year-over-year to $943 million; non-gaming revenue up 20.7% to $217 million.

• Operating income nearly doubled to $124 million, and net income attributable to Melco was $21.4 million.

• Macau OpEx increased from $2.7M to $2.9M per day, mainly due to a 2.5% salary increase and new hires.

• As of June 30, 2024, available liquidity was $3.09 billion, with cash and bank balances totaling $1.28 billion.

Outlook and guidance

• Depreciation and amortization for Q3 2024 expected at $135M–$140M; corporate expense at ~$20M; net interest expense at $120M–$125M.

• Modest incremental OpEx expected in H2 2024, with daily OpEx drifting up to ~$3.0M by year-end.

• Ongoing capital projects include Studio City cineplex, Grand Hyatt upgrades, and City of Dreams refurbishments.

• House of Dancing Water show reopening likely in Q1 2025, expected to add $0.1M/day to OpEx.

• Management expects continued growth in GGR and market position, supported by property enhancements and tourism recovery.