Melco Resorts reported Q2 revenue of $566.4m, more than triple the total recorded in Q2 2020, as the business rebounded from the impact of the novel coronavirus (Covid-19) pandemic but continued to report a loss.
Chief executive Lawrence Ho said the rebound was mostly due to the return of non-VIP mass market players.
“We are pleased to see a progressive recovery in business levels during the second quarter of 2021 in our integrated resorts, despite the challenges that we have faced as a result of the Covid-19 pandemic and related travel restrictions,” Ho said.
“Mass and premium mass market players have proven to be the primary drivers of the recovery this quarter and are expected to be going forward as we continue to dedicate our resources toward these segments of the market.”
Casino operations made up the vast majority of Q2 revenue, at $478.6m, up 224.2% year-on-year. Rooms, meanwhile, brought in $39.7m, up 451.4%, while food and beverage revenue increased by 345.1% to $25.4m and entertainment, retail and other revenue was up 47.7% to $22.3m.
Looking at revenue by venue, Melco’s City of Dreams Macau resort brought in $347.6m, a 129.8% increase from Q2 2020. Of this total, $52.2m came from non-gaming operations, more than four times the previous year’s total, meaning the remaining $295.4m came from gaming.
Studio City Macau brought in $104.5m in revenue, almost ten times the total from 2020, with $82.5m of this coming from gaming.
The City of Dreams Manila resort in the Philippines also experienced sharp year-on-year growth, with revenue growing seven times over to $52.7m, with $45.8m in gaming revenue.
The operator’s Mocha Clubs – a chain of gaming machine arcades throughout Macau – contributed $24.1m in revenue, up 3.9% year-on-year, as players staked $551.8m at the clubs.
Melco’s operations in Cyprus, meanwhile, brought in $10.0m, a 285.7% increase. Ho said Melco expects to open the City of Dreams Mediterranean resort in Cyprus in summer 2022.
While Melco’s operating costs and expenses grew more slowly than revenue – at 27.0% – these costs still came to $694.5m, more than the business brought in.
Costs of sales related to casino made up most of these costs at $369.8m, up 71.8%. Costs of sales for rooms grew just over 50% to $12.8m while food and beverage costs grew 53.9% to $23.9m.
General and administrative costs were down to $106.2m, while depreciation and amortisation costs declined to $126.9m. Other costs included property charges and payments to develop City of Dreams Manila.
After all of these operating costs, Melco recorded an operating loss of $128.1m, which was a 65.5% reduction from its 2020 loss.
Following $92.5m in non-operating costs – mostly made up of $87.1m in interest costs – the operator was left with a pre-tax loss of $220.2m, 48.6% lower than the loss it made in Q2 2020.
It then paid $327,000 in taxes for a net loss of $220.5m, compared to its 2020 net loss of $426.8m.
For the first six months of the year, Melco’s revenue was $1.09bn, up 11.0%, as Q2’s sharp revenue increase offset a decline in Q1.
Of this total, $912.4m came from casino, $79.4m from rooms, $51.5m from food and beverages and $42.0m from entertainment, retail and other sources.
Operating costs declined by 8.7%, to $1.38bn, but this still led to an operating loss of $290.9m, down 44.1%.
After $206.2m in other costs, Melco’s pre-tax loss was $497.0m, a 40.8% reduction from H1 2020.
After accounting for income taxes, the operator’s net loss was $498.0m, which was 41.2% less than in 2020.