In a Q3 earnings call on Tuesday, Melco Resorts & Entertainment announced total revenues of $1.18 billion, marking a 16% increase compared to the same period in 2023.
In Macau, Melco exceeded third-quarter expectations and started the fourth quarter strong, benefiting from Golden Week, which attracted over 993,000 visitors to the gaming hub—nearly reaching pre-pandemic levels.
According to Macau Business, Melco’s flagship City of Dreams saw three of its top mass-table drop days ever during the national holiday from 1-7 October. Similarly, Studio City, a sister property, experienced four of its best mass-table drop days during the same period.
Melco also operates City of Dreams Manila in the Philippines, which opened in 2015, and City of Dreams Mediterranean in Limassol, Cyprus, which launched last year as “Europe’s first integrated resort.” Though off to a slow start, the Cyprus location, including three satellite casinos, saw a 20.6% revenue increase in Q3, reaching $64.4 million.
The Hong Kong-based company is currently working on City of Dreams Sri Lanka, a new casino resort. Phase 1 debuted on 15 October with the opening of the Cinnamon Life luxury hotel, while Phase 2 will introduce a casino and additional non-gaming attractions.
By the numbers
In the third quarter, Melco's company-wide operating revenues reached $1.18 billion, marking a 16% increase from $1.02 billion in the same period in 2023. Casino gaming contributed $944.4 million, while room revenue brought in $111.0 million. Food and beverage sales added $73.5 million, and entertainment and retail offerings across Melco’s properties generated $46.3 million.
Operating income rose to $138.6 million, up from $94.7 million last year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to $322.5 million from $280.6 million in 2023. Net income reached $27.3 million, a turnaround from a net loss of $16.3 million last year.
Melco’s Chairman and CEO, Lawrence Ho, attributed the growth to "initiatives aimed at enhancing visitor engagement throughout our properties." These efforts included the launch of the new Signature Club for premium-mass players and an upgraded loyalty program with exclusive perks. “Our revamped loyalty program is beginning to show benefits in improving player reinvestment efficiency,” Ho stated.
Additionally, Melco has introduced a premium slot area at City of Dreams and a new Dragon Zone slot floor at Studio City in partnership with Aristocrat Gaming. The company is also implementing “smart tables” with radiofrequency identification (RFID) technology at Studio City’s baccarat tables, as reported by Macao News.
To further attract guests, City of Dreams now features a “new light tunnel entrance with live performances,” according to Ho. “We are committed to unveiling more exciting projects to support ongoing growth in Macau,” he added.
On the upswing
CBRE Equity Research analyst John DeCree believes Melco’s strong performance points to a positive trend in Macau’s gaming market. “Melco is elevating its strategy in Macau, targeting its highest-value clientele,” DeCree told investment site Seeking Alpha. He added that the momentum is likely to increase with the introduction of additional RFiD-enabled gaming tables.
These results support CEO Lawrence Ho’s positive outlook during the Q2 earnings call, where he noted, “We’ve seen steady growth in GGR both quarter-on-quarter and year-over-year. Our teams remain dedicated to expanding our market presence.”
Melco's capital expenditures for 2024 are projected to reach $400 million, with $70 million to $75 million allocated for City of Dreams Sri Lanka.
According to NASDAQ.com, Zacks Rank currently rates Melco stock as a “buy,” suggesting it might outperform the broader market in the short term.
