“The Liquidity Runway” of Macau casino operator Melco Resorts & Entertainment said in a note Monday by Singapore-based Lukerer Analytics that it was “the strongest of its peers at 22 months.”
Compared to Win Macau Inc’s “14 months,” Sands China Inc’s “12 months,” MGM China Holdings Inc’s “11 months” and SJM Holdings Inc’s “9 months,” the agency said.
As of the end of June, Melco Resorts had a cash balance of $1.65 billion and a revolving credit facility not withdrawn was $1.1 billion, Lukler noted. 경마사이트프로
“We estimate that this will be enough to support 22 months of cash burnout by April 2024 under the worst-case scenario of zero revenue,” senior credit analyst Leonard Lowe said in a note posted on the Smart Karma platform.
Casino operator Melco Resorts’ second-quarter net loss rose 35.4% year-over-year to just under $251.5 million.
Macau, the group’s normal core market, has cut city visitors since June as it faces its biggest COVID-19 community outbreak since the pandemic began toward the end of the second quarter.
In July, the Macau casino floor was only open for 19 days in 31 days of the month as a countermeasure against community infection.
But City of Dreams Manila, a casino resort in the Philippine capital run by the group, saw its 100% acceptable second-quarter revenue double year-on-year since March amid eased COVID-19 restrictions.
GROUP’S TOTAL OPERATING REVENUE FROM CYPROS CASINO BUSINESS IN Q2 WAS $21.7 MILLION, COMPARED TO $10 MILLION YEAR AGO.
Estimating the liquidity outlook for Melco Resorts, Rukler said, “We assumed an operating cost utilization of $1.7 million per day and a maintenance capital expenditure of $5 million per month, unchanged from Q2 2022.”
“We also considered $250 million in extended capital expenditures for Studio City Phase II and $5 billion in MOP deposits,” Mr. Lowe added. Approximately $620 million is “needed in the concession retender process,” it added.
In the group’s second-quarter earnings release on Aug. 18, MELCO Resorts Chairman and Chief Executive Officer Lawrence Ho Yaurung said he would launch the second phase of the multi-owned Studio City Casino Resort in Macau’s Kotai district in the second quarter of 2023 alone. He added that the full reopening of the phase was a step-by-step one.
Melco Resort, along with five others currently licensed to Macau, will have its current Macau Games rights expire on December 31. The company and colleagues are expected to participate in a new public tender for a 10-year gaming contract of up to six years.
The tender process begins at the end of July and runs through September 14, with the new rights expected to begin in early 2023.