• Adjusted Property EBITDA: Approximately $295 million for Q4 2024.
• Adjusted Property EBITDA (VIP Hold Adjusted): Approximately $312 million, 5% higher than Q3 2024.
• Operating Expenses (OpEx) in Macau: Increased to $3.2 million per day during Q4 2024.
• Liquidity Position: Available liquidity of $3.3 billion, with consolidated cash on hand of approximately $1.3 billion.
• Debt Maturities: Approximately $1.2 billion of debt due in 2025, covered by available liquidity.
• Corporate Expense: $25 million in Q4 2024, primarily due to trademark license fees.
• Share Repurchase: $20 million in MLCO shares repurchased since Q3 2024.
• Depreciation and Amortization Guidance for Q1 2025: Expected to be approximately $135 million to $140 million.
• Corporate Expense Guidance for Q1 2025: Expected to be approximately $25 million to $30 million.
• Net Interest Expense Guidance for Q1 2025: Expected to be approximately $100 million to $125 million.

• Warning! GuruFocus has detected 6 Warning Signs with MLCO.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Melco Resorts and Entertainment Ltd (NASDAQ:MLCO) reported a strong start to 2025, with market share growth continuing from the fourth quarter of 2024.
• Property visitation exceeded pre-pandemic levels, with a 17% increase compared to the previous year during the Chinese New Year period.
• The company is investing in enhancing customer experience and infrastructure, such as the revamp of the high limit area at Studio City and renovations at City of Dreams.
• Melco Resorts and Entertainment Ltd (NASDAQ:MLCO) has a strong liquidity position with $3.3 billion in available liquidity and $1.3 billion in consolidated cash on hand.
• The company is exploring strategic alternatives for City of Dreams Manila, aiming to enhance financial flexibility and support long-term growth initiatives.

Negative Points

• Operating expenses in Macau increased to $3.2 million per day during Q4 2024, partly due to new activations and additional programming.
• The company faces $1.2 billion of debt maturing in 2025, although it is covered by available liquidity.
• Melco Resorts and Entertainment Ltd (NASDAQ:MLCO) noted that the Chinese New Year trends were not as strong as anticipated, with choppy GGR in early 2025.
• The company is experiencing challenges in Cyprus, despite solid results from City of Dreams Mediterranean and satellite casinos.
• Melco Resorts and Entertainment Ltd (NASDAQ:MLCO) is implementing a trademark licensing fee for the first time, which adds to corporate expenses.

Q & A Highlights

Q: GGR has been choppy early this year, and trends around Chinese New Year were not as strong as anticipated. Can you provide your views on the overall market GGR growth for this year? Also, what are the implications of the asset-light strategy on Studio City? A: Lawrence Ho, CEO: We are committed to the asset-light strategy, which started with Sri Lanka. Regarding Studio City, taking on more interest is not a priority. As for GGR, Melco had an excellent January, one of the best in recent years. Although Chinese New Year wasn't as strong as expected, the tail has been longer, with February weekends stronger than the previous year. This spread of business is healthy, and we are pleased with how 2025 has started.

Q: Could you provide insight into your capital allocation strategy with potential proceeds from asset disposition? Would you focus on reducing leverage or a combination of debt reduction and share buyback? A: Geoffrey Davis, CFO: Paying down debt remains our primary objective. However, we are also considering capital-light investment opportunities and share buybacks, given our shares are undervalued. We will look closely at buying back more stock if deeply discounted valuations persist.

Q: Can you provide guidance on CapEx for different parts of the business, including Studio City and outside the restricted group? A: Geoffrey Davis, CFO: For 2025, we anticipate about $415 million in total CapEx, with $80 million for Sri Lanka and $290 million for Macau, of which $70 million is for Studio City. The remainder will be for Manila and Cyprus.

Q: What is driving the OpEx decline at the start of the year, and is it sustainable for the full year? A: Evan Winkler, President: In Q4, expenses were higher due to activations and advertising. We have since implemented measures to reduce costs and feel confident in maintaining lower OpEx levels. The market has become more rational, and we expect gradual easing in costs as we move through the year.

Q: Regarding the asset-light strategy in the Philippines, could this be extrapolated to Cyprus or potential interests in Thailand? A: Lawrence Ho, CEO: We are committed to the asset-light strategy in any feasible jurisdiction, including Cyprus. Thailand presents a generational opportunity, and while it's early days, we are open to various structures and partnerships for exceptional growth opportunities.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.