Melco reports net losses of $364 m in 1Q20

Operator reports a US$364 million net loss for the first quarter of the year as a result of the on-going Covid-19 pandemic.

Macau.- Melco Resorts has reported a US$364million net loss for the first quarter of the year as a result of the on-going Covid-19 pandemic.

The numbers compared with the $120.1 million in net profits recorded for the same period last year.

The gaming operator saw a 41 per cent year-on-year drop in operating revenues to $810million (MOP6.4billion) with Adjusted Property EBITDA cut by 82 per cent to $75.3 million.

Melco’s CEO, Lawrence Ho, said the group continues to “manage its balance sheet in a prudent manner” and has $1.2billion in cash and cash equivalents.

“With the entry into a new senior facilities agreement in April 2020, we have undrawn revolver capacity of approximately US$1.6billion,” the group said in a statement.

“In addition, we further bolstered our balance sheet with our sale of the shares we held in Crown Resorts Limited, resulting in gross sales proceeds of approximately US$355million,” the group added.

The pandemic looks set to impact the operator’s development projects across Asia.

“The Covid-19 outbreak has also impacted the construction of the Studio City Phase 2 project and the progress of construction works at the City of Dreams Mediterranean project,” the group noted.

“We currently expect additional time will be needed to complete the construction of both projects.”

Off the back of the results, Melco has decided to suspend its quarterly dividend program so as ‘to preserve liquidity’ and to ‘continue investing in our business’.

“Melco remains committed to returning capital to shareholders with a regular quarterly dividend and will evaluate the resumption of its quarterly dividend as the operating environment evolves,” Ho added in the financial report.