Melco Resorts Tops Earning Expectations Again, Company Announces $1.4B Macau Investment
Posted on: July 25, 2019, 09:42h.
Last updated on: July 25, 2019, 09:42h.
Melco Resorts, one of the six licensed casino operators in Macau, once again beat Wall Street earnings expectations, as the company reported a 17 percent operating revenue increase to $1.44 billion.
The casino company founded by billionaire Lawrence Ho – one of Macau “Founding Father” Stanley Ho’s 17 children – reported quarterly earnings of $0.24 per share. That beat the Wall Street consensus expectation of $0.20 per share.
Earnings before interest, tax, depreciation, and amortization (EBITDA) totaled $442.2 million, a 24 percent surge on the same quarter in 2018.
Going forward, we will continue to invest heavily in Macau to further upgrade our resorts to expand our asset footprint and further enhance our world-leading travel and entertainment destination,” Ho told investors during a call.
Melco owns and operates City of Dreams, Studio City, and Altira in Macau. The company additionally owns City of Dreams Manila in the Philippines, and is currently constructing Europe’s first integrated resort in Cyprus.
Melco Resorts CEO Ho announced the second phase of Studio City on Macau’s Cotai Strip will be a $1.35 billion to $1.4 billion project. The billionaire said the expansion will be funded through cash on hand, as well as borrowing.
Ho says the addition will add two more hotel towers to the resort, more gaming space, and “one of the world’s largest indoor water parks.”
While the company continues to invest in Macau – the world’s richest gaming hub – Ho says Melco is deeply focused on Japan and its forthcoming commercial integrated casino resorts. The planet’s third richest country in terms of gross domestic product has authorized three casino properties, and has the attention of the global gaming industry.
“We have been working diligently in Japan,” Ho explained. “At the first Japan IR expo in Osaka, we released images of our proposed Osaka IR, City of the Future, which should give relevant stakeholders a better idea of our vision for Japan.”
“We believe the license bidding process remains on track to start in 2020. All focus on the Asian premium segment, a portfolio of high-quality assets, devotion to craftsmanship, dedication to world-class entertainment offerings, market-leading social safeguards system, established track record of successful partnerships, culture of exceptional guest service, and commitment to employee development will put Melco in a strong position to help Japan realize the vision of developing world leading IRs with a unique Japanese touch,” the billionaire concluded.
Melco Resorts has now topped Wall Street expectations for the third time in four reporting periods. But the NASDAQ-traded stock over the last year is still down over the last 12 months.
This day a year ago, Melco was at $25.95. Shares closed yesterday at $25.00 – a 3.66 percent decline. Ongoing trade tensions between the US and China continue to threaten the Macau economy.
During the same 12-month period, the Dow Jones Industrial Average has gained more than seven percent.
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