Melco Resorts & Entertainment Suffers From Revenue Drop Due To Pandemic

Article by : Helen Nov 18, 2020

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COVID-19 has already negatively impacted the revenue of many world-known casino software-delivering companies. Melco Resorts & Entertainment (MRE), a huge Hong Kong-based casino operator, has also felt the direct impact of the pandemic. According to the official data, MRE lost more than US$330 million in the 3rd quarter of 2020. Almost all of its facilities, excluding the Manila and Cyprus operations, are reporting negative earnings.

During 3 months of the 3rd quarter, MRE generated revenue of only US$213 million, which is 85% less than the results of the same period of the previous year. The casino operator reported a net loss of over US$330 million, while the 3rd quarter of 2019 ended up in US$83.2 million profit. Anyway, this is still slightly better than the net loss of US$368 million in the 2nd quarter of 2020.

Chairman and CEO of Melco Resorts & Entertainment, Lawrence Ho, sees the light at the end of the tunnel thanks to gambling operations resumption in the Cyprus and Manila facilities. Besides, he also hopes that after the mitigation of travel rules, the Macau facilities will also recover and start generating good revenue.

Melco also fully supports the Macau SAR government’s newly launched scheme for tourists from Mainland China with the aim to expand the number of visitors, boost the economy and protect local jobs.

City of Dreams, the major MRE’s facility in Macau, reports an 88% revenue drop to US$91 million, a higher provision for credit losses, and a 90% drop in VIP gambling turnover. A similar situation is detected at Studio City, with negative earnings of more than US$20 million.

MRE’s Manila facilities have been operating at 30% of their capacity due to the late reopening in August 2020. Nevertheless, the property managed to warm MRE with US$5 million earnings generated during half of the quarter. An improved VIP win rate of 2.6% added up to the Manila casino success and helped make up for the 77% drop in VIP gambling turnover.

According to the Philippine mass media, the country’s government has allowed casinos to provide local punters with online gambling activities, which may make up for the land-based limitations. This might be a decent opportunity for City of Dreams Manila to generate some revenue, but Lawrence Ho didn’t comment on that. In any case, the government is yet to specify which types of online gambling will be authorized and what limitations will have to be adhered to.

The company also owns and operates several facilities in the Republic of Cyprus. These include 1 temporary casino, which is, in fact, the first casino in the Republic, and 4 satellite casinos. The total operating revenue of the Cyprus facilities was US$20.5 million, which is 30% less than in the 3rd quarter of 2019. MRE is going to close the temporary casino after the City of Dreams Mediterranean project will be completed. According to Lawrence Ho, the City of Dreams Mediterranean will be the biggest integrated resort in Europe with more than 500 high-class hotel rooms, 10,000 square meters of MICE space, a 1,500-seat amphitheater, and many other facilities.