Revenue for the 12 months to 31 December 2023 hit $3.78bn (£3.00bn/€3.49bn), up 179.6%. Melco put this down mainly to the relaxation of pandemic-related restrictions within its core Macau market.
However, Melco also noted the impact of Studio City Phase 2 in Macau in January 2023. This featured new hotel, retail and dining facilities, thus helping increase revenue in the region.
Seeking to build on this, Melco will this year be pushing ahead with more development. This includes a new cineplex at Studio City Phase 2 and renovations at the Countdown Hotel, also in Macau.
“2023 was a year of post-pandemic recovery and the debut of our new developments,” chairman and CEO Lawrence Ho said. “2024 is set to be another exciting year for us as we continue to develop new ideas and strategies to bring market-leading leisure and entertainment offerings to our customers.
“Macau continues to demonstrate its extraordinary growth potential and has shown resilience despite China’s uncertain macroeconomic outlook.”
Macau COO exits Melco
However, as the results were announced, Melco was dealt a slight blow in Macau with the news that David Sisk, chief operating officer for the region, had resigned.
“We’ll be conducting a thorough search process to identify and appoint a high calibre individual to steer our business forward in Macau,” Ho said. “In the interim, Evan Winkler, our president, and I will be actively involved in the day-to-day operations of our Macau properties.”
Looking outside Macau
As for activities outside of the core Macau region, Melco in 2023 also opened a new casino in Europe. The City of Dreams Mediterranean opened its doors in July, increasing Melco’s presence in the European market.
There are also murmurings that Melco could explore opportunities in other countries. When the subject was raised in an investor call, Ho said it is still too early to talk about certain markets, but some projects could be in the offing.
“I think given we’re still climbing out of the Covid hole,” Ho said, “I think we’re looking at some like smaller potential projects, but nothing, I think that’s ready to be announced.
“But in terms of the longer-term, bigger projects like UAE or Thailand, I think we’re kicking the tyres like everybody else. But as we learned from the Japan process, these things usually take time and it’s a multi-year process.”
Growth across the board for Melco
Looking at 2023, Melco reported revenue growth in all segments. Casino revenue hiked 186.0% to $3.08bn, while rooms revenue jumped 190.1% to $338.2m, food and beverage revenue 144.3% to $208.9m and entertainment, retail and other revenue 110.9% to $150.8m.
Melco did not publish a full-year breakdown of each property but did go into detail on costs for the year. Operating expenses jumped 77.3% on the back of Macau’s full reopening, with the main outgoing being casino costs at $2.03bn.
Melco also noted $466.9m in non-operating expenses, primarily interest costs. However, such was the impact of revenue growth that pre-tax loss improved from $1.09bn in 2022 to $401.9m.
The operator received $35.9m in tax benefit and accounted for $88.4m in income from non-controlling interests. As such, net loss for the year hit $277.6m, compared to $930.5m in the previous year.
In addition, adjusted property EBITDA hit $1.04bn for the year, in contrast to $0.6m in 2022.
Ending the year on a high
Turning to Q4, revenue for the final three months of 2023 increased 224.5% to $1.09bn. Of this, $897.8 came from casino activity, $103.4m rooms, $65.2m food and beverage and $27.2m entertainment, retail and other.
Operating costs increased 121.4% to $1.19bn while non-operating expenses amounted to $117.6m. This resulted in a pre-tax loss of $212.0m, an improvement on the previous year’s $293.4m.
Melco received $34.6m in tax benefit and noted $20.8m in income from its non-controlling interests. This resulted in a Q4 net loss of $156.6m, compared to $251.9m in 2022.
As for adjusted property EBITDA, this was 4,371.8% ahead of 2022 at $303.4m in Q4.
Original article: https://igamingbusiness.com/finance/full-year-results/melco-targets-growth-after-post-pandemic-recovery-in-2023/
