Melco Resorts ok at zero Macau revenue to 2024: analyst

August 25, 2022 Macau Earnings & Filings Industry Updates

The “liquidity runway” for Macau casino operator Melco Resorts and Entertainment Ltd is “the strongest among peers at 22 months,” says a Monday memo from Singapore-based Lucror Analytics.

That compared to “14 months” for Wynn Macau Ltd, “12 months” for Sands China Ltd, “11 months” for MGM China Holdings Ltd, and “nine months” for SJM Holdings Ltd, said the institution.

As of the end of June, Melco Resorts had a cash balance of US$1.65 billion and an undrawn revolving credit facility of US$1.1 billion, noted Lucror.

“We estimate that this would be sufficient to support 22 months of cash burn – until April 2024 – under the worst-case scenario of zero revenues,” wrote senior credit analyst Leonard Law, in a note posted to the Smartkarma platform.

The second-quarter net loss at casino operator Melco Resorts rose 35.4 percent year-on-year, to just under US$251.5 million.

The group’s normally-core market, Macau, faced its largest community outbreak of Covid-19 since the start of the pandemic toward the end of the second quarter, which curtailed the number of visitors to the city starting in June.

In July, Macau casino floors were only running for 19 out of the 31 days of the month, due to community infection countermeasures.

But at City of Dreams Manila, a casino resort in the Philippine capital, run by the group, which has been able to operate at 100 percent capacity since March amid easing of Covid-19 restrictions there, second-quarter revenue doubled year-on-year.