Melco Resorts & Entertainment ((MLCO)) has held its Q3 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 robust growth across its key markets, despite facing some operational challenges. The sentiment was largely positive, with strong performances in Macau, the Philippines, and Cyprus, alongside effective cash flow management and debt reduction. However, the company acknowledged hurdles such as the impact of a typhoon on Macau operations, competitive pressures in the region, and early-stage challenges in Sri Lanka.
Solid Growth in Macau
Macau properties were a standout performer, achieving a 21% year-over-year increase in property EBITDA, even after a $12 million setback due to a typhoon. The region’s Gross Gaming Revenue (GGR) surged over 30% year-over-year following Golden Week, with the City of Dreams (COD) recording its highest monthly mass tables GGR in October.
Impressive Growth in Philippines and Cyprus
The Philippines and Cyprus also reported remarkable growth. The Philippines saw a 45% quarter-over-quarter rise in property EBITDA, while Cyprus’s City of Dreams Mediterranean and satellite casinos experienced a 53% year-over-year increase, reaching $23 million in property EBITDA.
Group-wide EBITDA Growth
Overall, the company achieved an 18% year-over-year growth in group-wide adjusted property EBITDA for the third quarter of 2025, totaling approximately $380 million.
Strong Liquidity Position
Melco Resorts & Entertainment maintains a strong liquidity position, with $2.6 billion available and a cash reserve of approximately $1.6 billion as of the end of the third quarter.
Debt Reduction and Cash Flow Management
The company successfully reduced its debt by $180 million in the third quarter, with an additional $180 million repaid in October and November, showcasing effective cash flow management.
Impact of Typhoon on Macau Operations
Macau operations were impacted by a typhoon in September, resulting in a $12 million negative effect, highlighting the challenges of operating in a region prone to natural disruptions.
Challenges in Sri Lanka
In Sri Lanka, Melco is in the early stages of establishing its operations, focusing on capturing the Indian market while overcoming initial hurdles.
Competitive Environment in Macau
The competitive landscape in Macau remains intense, affecting margins. Despite this, the promotional environment is stable, allowing Melco to navigate these challenges effectively.
Operational Expenses Increase
An increase in operational expenses is anticipated due to support for the China National Games and promotions for Studio City’s 10th anniversary.
Forward-looking Guidance
Looking ahead, Melco Resorts & Entertainment anticipates continued growth, with a balanced approach to cash allocation, including potential dividends by the end of next year. The company remains committed to its debt reduction strategy and operational discipline, maintaining stable operational expenses in Macau.
In conclusion, Melco Resorts & Entertainment’s earnings call reflects a positive outlook with strong growth in key markets and effective financial management. Despite some challenges, the company is well-positioned for future success, with a focus on strategic growth and maintaining a robust financial position.