Melco to see pre-pandemic leverage in 1 to 2 years, analysts say

S&P Global Ratings forecasts Melco Resorts & Entertainment’s return to pre-pandemic deleveraging within 12 to 24 months

Macau.- S&P Global Ratings has projected a potential return to pre-pandemic deleveraging for Melco Resorts & Entertainment in the next 12 to 24 months. That’s based on anticipated adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) recovery supported by the expansion of the mass gaming market. 

According to an analysis by the credit ratings agency, higher visitor arrivals and ongoing hotel expansion initiatives are expected to sustain growth in Macau’s mass-market segment. They said the upcoming inclusion of Xi’An city and Qingdao city in Beijing’s individual visit scheme should increase visitation to Macau.

In the first two months of 2024, Macau’s mass gross casino revenue grew between 12 per cent and 13 per cent compared to 2019 levels. This growth trajectory aligns with S&P’s forecast range of 5 per cent to 15 per cent for 2024 compared to pre-pandemic levels.

Melco Resorts & Entertainment recently reported an operating revenue of US$1.09bn for Q4, up 224 per cent in year-on-year terms. The company reported an operating loss of US$94.4m, compared with an operating loss of US$199.5m in the fourth quarter of 2022. The group’s EBITDA was US$303.4m compared with negative US$6.8m.