A Lucror Analytics report indicates that Melco Resorts & Entertainment Ltd has the best liquidity runway among its peers.
Macau.- Singapore-based Lucror Analytics has issued a report analysing Macau casino operators’ liquidity. It found that Melco Resorts & Entertainment is in the strongest position with a 22 months liquidity runway.
It found that Wynn Macau has a 14 months liquidity runway, Sands China 12 months, MGM China Holdings 11 months and SJM Holdings nine months. Its liquidity outlook for Melco assumes an operating expense run rate of US$1.7m per day and maintenance capital expenditure of US$5m per month.
Writing on the Smartkarma platform, Leonard Law, a senior credit analyst, said: “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.”
Melco has recently announced that its net loss rose 35.4 per cent year-on-year to US$251.5m. The group’s operating revenue for the second quarter was US$296.1m, a drop of 47.7 per cent from US$566.4m reported in the second quarter of 2021. When compared to the first quarter of 2022, the figure slipped 37.7 per cent.
The group’s adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) was negative US$13.8m, versus a positive US$79.1m in the prior-year quarter.
While sharing the financial results for the second quarter of the year, Lawrence Ho Yau Lung, the group’s chairman and chief executive said: “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.”