雅虎香港財經 Melco Resorts & Entertainment Limited (NASDAQ:MLCO) Q4 2023 Earnings Call Transcript
Melco Resorts & Entertainment Limited (NASDAQ:MLCO) Q4 2023 Earnings Call Transcript February 29, 2024
Melco Resorts & Entertainment Limited misses on earnings expectations. Reported EPS is $-0.36 EPS, expectations were $0.03. Melco Resorts & Entertainment Limited isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Ladies and gentlemen, thank you for participating in the Fourth Quarter 2023 Earnings Conference Call of Melco Resorts & Entertainment Limited. At this time, all participants are in a listen-only mode. After the call, we will conduct a question-and-answer session. Today's conference is being recorded. I would now like to turn the call over to Ms. Jeanny Kim, Senior Vice President, Group Treasurer of Melco Resorts & Entertainment Limited.
Jeanny Kim: Thank you, operator, and thank you, all for joining us today for our fourth quarter 2023 earnings call. On the call are Lawrence Ho, Geoff Davis, Evan Winkler, and our Property Presidents in Macau, Manila, and Cyprus. Before we get started, please note that today's discussion may contain forward-looking statements made under the Safe Harbor provision of Federal Securities Laws. Our actual results made differ from our anticipated results. In addition, we may discuss non-GAAP measures. A definition and reconciliation of each of these measures to the most comparable GAAP financial measures are included in the earnings release. Finally, please note that our supplementary earnings slides are posted on our Investor Relations website. With that, I'll turn it over to Mr. Lawrence Ho.
Lawrence Ho: Thank you, Jeanny, and thank you for joining us today. Many of you may already be aware that David Sisk, our COO, of Macau has resigned. We'll be conducting a thorough search process to identify and appoint a high caliber individual to steer our business forward in Macau. In the interim, Evan and I will be actively involved in the day-to-day operations of our Macau properties. As we move forward, our focus is to ensure that Melco's leading the market in all aspects of our business through innovation and collaboration. With this in mind, we're also adding to our leadership team with new appointments in gaming operations, retail, hotels and food and beverage. We expect these new additions to the leadership team and management changes will strengthen us as a team to secure a stronger and more competitive future.
Turning back to our results. Macau continues to demonstrate its extraordinary growth potential and has shown resilience despite China's uncertain macroeconomic outlook. Visitation to Macau during this month's Chinese New Year holiday period was close to 2019 levels and the number of visitors from China exceeded 2019. Our mass GGR and Macau Co property EBITDA during this CNY holiday period was meaningfully higher than 2019 levels. 2023 was a year of post-pandemic recovery and the opening of new properties, the City of Dreams Mediterranean and Studio City Phase 2. The Epic Hotel Tower at Studio City Phase 2 offers our patrons a luxury hotel product, which had not been available at Studio City before, with two, three bedroom suites and villas.
It is attracting a high end customer base to the property and driving gaming demand with the help of the new high limit gaming area that opened in December on the second floor of the Epic Tower. The ABT generated by this customer base are at levels that had not been seen at Studio City previously, and Studio City is reaching record levels of daily mass and slot GGR. 2024 is set to be another exciting year for us. Among the various ongoing events and projects, our Residency Concert Series at Studio City is scheduled to start in March. We've started construction of the cineplex at Studio City Phase 2, and we aim to bring back our award winning show the House of Dancing Water by the end of the year. We will also start renovations on the Countdown Hotel to bring a new high end luxury hotel offering to our premium mass customers.
In the Philippines, City of Dreams Manila continues to generate solid earnings with significant market share gains in mass table games and slots. City of Dreams Mediterranean in Cyprus continues to be impacted by the conflict in Israel, and it is uncertain how long this will last. However, we have seen some signs of improving demand so far this year. So with that, I'll turn the call over to Geoff to go through some of the numbers.
Geoff Davis: Thank you, Lawrence. Our group-wide adjusted property EBITDA for the fourth quarter of 2023 was approximately $303 million. Luck-adjusted group-wide property EBITDA for the fourth quarter of 2023 came in at $320 million; a favorable win rate had a positive impact on COD Manila of around $3 million, while unfavorable win rates at COD Macau, Studio City and Cyprus had a negative impact of approximately $20 million. Details of these adjustments can be found in the supplementary earnings slides posted on our Investor Relations website. Macau OpEx increased to approximately $2.6 million per day in the first quarter of 2024 from approximately $2.5 million per day in the third quarter in line with guidance. This was primarily due to the full quarter impact of the W Macau at Studio City, which opened in early September 2023.
Turning to our balance sheet. We repaid another $200 million of our revolving credit facilities during the fourth quarter of 2023 and repurchased $100 million of bonds at Studio City via cash tender. On a consolidated basis, we reduced debt by a total of $950 million over the course of 2023 and we will continue to focus on debt reduction into 2024. As of December 31, 2023, we had around $1.4 billion of the consolidated cash on hand. Melco excluding its operations at Studio City, the Philippines and Cyprus accounted for around $750 million. Of this, approximately $125 million was restricted as collateral required for concession-related guarantees issued to the Macau government. Another notable movement in our balance sheet in 4Q 2023 is the impairment of Altira by approximately $200 million.
Altira has faced some challenges with the change in the VIP segment and we continue to work through the repositioning of the property. Altira broke-even in 4Q 2023 and we expect performance to improve in 2024. As we normally do, we'll give you some guidance on non-operating line items for the upcoming first quarter of 2024. Total depreciation and amortization expense is expected to be approximately $135 million to $140 million. Corporate expense is expected to come in at approximately $20 million and consolidated net interest expense is expected to be approximately $125 million to $130 million. This includes finance liability interest of around $6 million relating to fees and payable -- fees payable in relation to the Macau government gaming concession and the Cypress gaming license, and finance lease interest of approximately $6 million relating to City of Dreams Manila.
That concludes our prepared remarks. Operator, back to you, for the Q&A.
See also 14 Social Security Spousal Benefits and Loopholes You Need to Know and 15 Highest Paying Countries for Photographers.
To continue reading the Q&A session, please click here.
