Melco Resorts & Entertainment ((MLCO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Melco Resorts & Entertainment’s recent earnings call painted a picture of cautious optimism, with strong growth in key areas like Macau, despite facing challenges in other regions. The company reported significant EBITDA growth and a solid liquidity position, while also acknowledging competitive pressures in the Philippines and geopolitical issues impacting Cyprus operations.
Strong Performance in Macau
Macau emerged as a standout performer for Melco Resorts, with property EBITDA surging by 35% year-over-year and 13% quarter-to-quarter. The region saw gaming volumes and revenues rise, with mass table games revenue at City of Dreams and Studio City reaching unprecedented levels.
House of Dancing Water Success
The reopening of the House of Dancing Water show in May, with its refreshed storyline and enhanced visuals, was a triumph. It achieved an impressive 98% theater occupancy, significantly boosting non-gaming revenue and attracting more visitors to Macau.
Group-wide EBITDA Growth
Melco Resorts reported a 25% year-over-year increase in group-wide adjusted property EBITDA, reaching approximately $378 million for the second quarter of 2025. This growth underscores the company’s robust financial health and operational efficiency.
Resilient Liquidity Position
The company maintains a strong liquidity position with $2.3 billion available, including $1.2 billion in cash. This financial resilience provides a solid foundation for future investments and market expansions.
Launch of City of Dreams Sri Lanka
August 1 marked the opening of City of Dreams Sri Lanka, the first integrated resort in Sri Lanka and South Asia. This strategic move targets the premium Indian customer base, expanding Melco’s footprint in the region.
Philippines Market Challenges
Melco faced competitive pressures in the Philippines, which impacted performance. In response, the company initiated cost-reduction strategies and rationalized patron reinvestment and marketing expenses.
Impact of Iran-Israel War on Cyprus Operations
The Iran-Israel conflict in June affected City of Dreams Mediterranean and satellite casinos in Cyprus. However, the operations rebounded faster than anticipated, showcasing resilience in the face of geopolitical challenges.
Impairment Due to Casino Closures
The closure of Grand Dragon Casino and three Mocha Clubs led to a goodwill impairment of approximately $56 million, reflecting the challenges faced in certain markets.
Forward-Looking Guidance
Looking ahead, Melco Resorts anticipates continued strong performance in Macau, with property EBITDA margins at 29.2% due to reduced operating expenses. The company remains optimistic about recovery in the Philippines and Cyprus, backed by a solid liquidity position and strategic market expansions, including the recent launch in Sri Lanka.
In summary, Melco Resorts & Entertainment’s earnings call highlighted a cautiously optimistic outlook, with robust growth in Macau and strategic expansions offsetting challenges in other regions. The company’s strong liquidity and strategic initiatives position it well for future growth, despite geopolitical and competitive hurdles.