Why Casino Gaming Operator Melco Resorts & Entertainment Shares Are Down Today

Melco Resorts & Entertainment Limited MLCO shares are trading lower after the company reported fourth-quarter FY23 results.

Sales growth of 224% Y/Y to $1.09 billion missed the analyst consensus estimate of $1.128 billion.

The Y/Y growth in revenues was primarily attributable to the improved performance in all gaming segments and non-gaming operations following the relaxation in Macau of COVID-19-related restrictions in January 2023 and the opening of Studio City Phase 2.

Revenue from City of Dreams increased to $559.8 million from $139.2 million a year ago, with rolling chip volume rising significantly to $5.19 billion from $850.4 million the prior year. The rolling chip win rate at the property was 2.55% vs 4.47% a year ago, with an expected rolling chip win rate range of 2.85%-3.15%.

Revenue from Studio City increased to $302.5 million from $43.4 million a year ago, and City of Dreams Manila rose to $120.5 million from $95.2 million the prior year.

Melco Resorts & Entertainment generated an adjusted Property EBITDA of $303.4 million in the quarter compared to a negative adjusted property EBITDA of $(6.8) million last year. Adjusted loss per ADS of $0.127 beat the analyst consensus estimate of $0.04.

As of Dec. 31, 2023, cash and bank balances stood at $1.44 billion and debt of $7.47 billion.

Lawrence Ho, chairman and CEO said, “City of Dreams Manila in the Philippines has continued to show solid growth with significant market share gains in mass table games and slots. City of Dreams Mediterranean in Cyprus continues to be impacted by the conflicts in the region but is starting to show some signs of recovery so far this year.”

MLCO Price Action: Melco Resorts & Entertainment shares are down 7.81% at $7.62 Thursday at publication.

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Photo: Courtesy Melco Resorts & Entertainment