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01/11 03:22
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call indicates strong financial performance, with significant EBITDA growth and stable margins. Liquidity and debt reduction are also positive factors. Despite some uncertainties, such as disappointing Golden Week and vague management responses, the overall sentiment remains positive due to strategic expansions, stable operations, and optimistic future guidance.
Macau Property EBITDA Grew by 21% year-over-year despite a $12 million negative impact due to a typhoon in September.
Macau GGR (Gross Gaming Revenue) Grew over 30% year-over-year post Golden Week, with COD recording its highest monthly mass tables GGR ever in October.
Philippines Property EBITDA Grew 45% quarter-over-quarter, showing good momentum in October.
Cyprus Property EBITDA Grew 53% year-over-year to $23 million, despite regional hostilities earlier in the quarter.
Group-wide Adjusted Property EBITDA Grew 18% year-over-year to approximately $380 million. Adjusted for VIP hold, it was approximately $355 million. Favorable win rates at COD Macau and COD Manila positively impacted EBITDA by $23 million and $2 million, respectively.
Macau Property EBITDA Margin Held steady at approximately 29% in the third quarter of 2025, reflecting disciplined cost management.
Operational Expenditure (OpEx) in Macau Remained stable at approximately $3 million per day, excluding House of Dancing Water and Residency concerts. House of Dancing Water OpEx was approximately $100,000 per day.
Liquidity Position Available liquidity was $2.6 billion, with consolidated cash on hand of approximately $1.6 billion as of the end of the third quarter of 2025. Melco's cash balance increased by $360 million quarter-over-quarter, largely due to $500 million in bonds issued in September.
Debt Reduction Reduced debt by $180 million in the third quarter ($70 million at Melco and $110 million at Studio City). An additional $180 million was repaid in October and November.
Signature Clubhouse at City of Dreams: Opened in July, offering premium mass customers private gaming salons, hair services, a Formula One simulator, and other exclusive amenities.
New gaming area at City of Dreams: Reopened in September with 15 gaming tables, designed for walk-in crowds with lower table minimums.
Renovation of Countdown Hotel: Started renovations, expected to open in Q3 2026, offering a unique experience in Macau.
Expanded high-limit gaming area at Studio City: Unveiled new private gaming salons at Epic Tower for premium mass customers.
iRAD hospital at Studio City: Relaunched in October to enhance Macau's tourism infrastructure with healthcare and wellness services.
City of Dreams Sri Lanka: Opened on August 1 as the first integrated resort in Sri Lanka and South Asia.
Macau GGR growth: Grew over 30% year-over-year post Golden Week, with COD recording its highest monthly mass tables GGR in October.
Philippines EBITDA growth: Property EBITDA grew 45% quarter-over-quarter.
Cyprus EBITDA growth: Property EBITDA grew 53% year-over-year to $23 million, marking its best quarter yet.
Operational discipline in Macau: Maintained stable OpEx at approximately $3 million per day, excluding specific events.
Debt reduction: Reduced debt by $180 million in Q3 and an additional $180 million in October and November.
Liquidity position: Available liquidity of $2.6 billion, with $1.6 billion in consolidated cash on hand.
Closure of Grand Dragon Casino and Mochas: Reallocated gaming tables and machines to other properties in Macau.
Bond issuance and debt management: Issued $500 million in bonds in September, used proceeds to redeem senior notes due 2026, eliminating material debt maturing in 2026.
Typhoon Impact: The typhoon in September negatively impacted Macau operations, resulting in a $12 million loss.
Closure of Facilities: Closure of Grand Dragon Casino and multiple Mocha facilities in Macau, with gaming resources reallocated, could disrupt customer experience and operational efficiency.
Geopolitical Risks in Cyprus: Escalation of hostilities in the region at the beginning of the quarter poses risks to operations in Cyprus.
Early Stage Operations in Sri Lanka: City of Dreams Sri Lanka is in its early operational phase, which presents challenges in ramping up and stabilizing operations.
Debt Management: Although debt has been reduced, the company still faces significant financial obligations, including interest expenses and bond repayments.
Renovation and Expansion Plans: The Countdown Hotel renovation is expected to be completed in the third quarter of 2026, bringing a unique experience to Macau. Simultaneous upgrades to retail and food and beverage offerings in the City of Dreams precinct are planned.
Gaming Operations Adjustments: Two more Mochas will be closed by the end of the year, with gaming machines reallocated across three Macau properties.
Macau Property EBITDA Margin: Macau property EBITDA margin is expected to remain stable at approximately 29%, reflecting disciplined cost management.
Depreciation and Amortization Expense: For the fourth quarter of 2025, depreciation and amortization expense is expected to be approximately $135 million to $140 million.
Corporate Expense: Corporate expense for the fourth quarter of 2025 is projected to be approximately $25 million to $30 million.
Net Interest Expense: Consolidated net interest expense for the fourth quarter of 2025 is expected to be approximately $115 million to $120 million.
Share Repurchase: In October, the company canceled $18.5 million of the approximately 32 million ADSs that were repurchased earlier this year at an average price of $5.10 per ADS.
The earnings call indicates strong financial performance, with significant EBITDA growth and stable margins. Liquidity and debt reduction are also positive factors. Despite some uncertainties, such as disappointing Golden Week and vague management responses, the overall sentiment remains positive due to strategic expansions, stable operations, and optimistic future guidance.
The earnings call summary reveals strong financial performance with increased market share, property visitation, and EBITDA growth. Renovations and strategic cost adjustments are enhancing profitability. The Q&A section indicates optimism about future performance, with management addressing competitive challenges and expressing confidence in market momentum. The sentiment is slightly tempered by uncertainties in the Philippines and Sri Lanka, but overall, the positive aspects outweigh the negatives, suggesting a positive stock price movement in the short term.
The earnings call highlights strong financial performance with increased EBITDA and effective cost management, alongside a strategic share repurchase plan. The Q&A section reveals no significant competitive threats and strong visitation growth, supporting a positive outlook. While management's responses lacked clarity on some aspects, the overall sentiment remains positive, bolstered by market share maintenance and liquidity strength. Given the market cap of approximately $3.34 billion, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
The earnings call reveals mixed signals: strong EBITDA growth and liquidity are offset by regulatory and competitive pressures. While OpEx is projected to decline, high debt maturities and uncertain regulatory conditions pose risks. The share repurchase program is a positive, but the lack of clarity on strategic alternatives and asset-light strategy tempers optimism. Given the market cap of $3.34 billion, the stock is likely to experience moderate movement, resulting in a neutral sentiment prediction.
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