Losses mount as Melco remains “heavily impacted” by pandemic
In the three months leading to 30 June, the revenue declined to US$296.1m (£246.8m/ €292.5m) from $566.4m the previous year, a 48.0% fall. For the six months leading to 30 June, revenue was down from $1.09bn to $771.5m – a 29.2% decline.
The business’s operating loss subsequently increased in the three-month period from $128.1m to $209.2m – a 63.3% increase. Net losses also increased from $220.2m to $251.5 million.
Larges losses in Q1 prompted the business to promise “disciplined liquidity management” to steady the ship. Melco is also on track now to have lower revenue in 2022 than 2021.
Melco chairman and CEO Lawrence Ho pointed to continuance of the Covid-19 pandemic as the main causes of the company’s woes: “It goes without saying that our results for the second quarter of 2022 were heavily impacted by the Covid-19 pandemic and the restrictions imposed across mainland China and Macau.”
“Throughout the pandemic, ensuring the health and safety of our colleagues has been very important, and these continued to be our highest priority through the recent outbreak in Macau.”
Ho pointed to the increase in custom in Cyprus and the Philippines as potential bright spots in the face of this.
“In contrast to the challenges we have been facing in Macau, our businesses in the Philippines and Cyprus have been improving with volumes gradually recovering toward pre-Covid levels,” he said.
“City of Dreams Manila has been operating at 100% capacity since 1 March, 2022 and saw a fairly quick recovery in domestic business. International visitation continues to ramp up, and we expect to see further growth as more of the travel restrictions around Asia are lifted and travel returns to normal. Cyprus also saw a pick-up in volumes and profitability with a relaxation in Covid-19 related restrictions.”
Ho also updated shareholders regarding ongoing construction projects which will characterise the face of the business in the post-Covid era.
“The construction of Studio City phase 2 is progressing well. We will be monitoring the markets closely to determine the appropriate time to open and currently anticipate phasing the opening beginning in the second quarter of 2023.”
“In Cyprus, the City of Dreams Mediterranean project has experienced delays due to some difficulties that we have encountered with our contractors. At this point in time, we expect to open in early second quarter 2023, subject to regulatory approvals. However, this remains a fluid situation and we continue to look at ways to expedite the progress.”