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With that, I'll now turn the call over to Mr. Lawrence Hull.
8m 51s
Thank you, Jeannie, and thank you all for joining us today. We have achieved a solid set of results for the first quarter of twenty twenty five. That demonstrates our strength and our growth prospects in Macau. Massdrop grew each month during the quarter, and reached record highs at both City of Dreams and Studio City. Our market share grew from 14.7% in 4Q twenty twenty four to 15.7% in 1Q twenty twenty five. And remained stable at this level in April. Despite new supply in the market. Property property visitation grew by 30% year on year during May Golden Week. Massdrop was stronger than twenty four twenty twenty four, with City of Dreams growing by more than 20%. Rated CO win was also strong across our properties in the and across a broad range of customers. Increasing by 12% year on year. House of Dancing Water premiered last night and the event was a resounding success. We're excited to have relaunched this one of a kind show which will help drive visitation to City of Dreams. We're continuing work on a number of other initiatives to drive the traffic. Including a revamp of our retail area and renovation of the main entrance to City of Dreams.
10m 17s
Studio City property EBITDA increased 20% quarter to quarter. Studio City experienced some disruption in 4Q twenty twenty four because of the renovations of the hotel lobbies as well as the high limit areas. Most of these renovations were completed in January. And Studio City's main entrance area has seen a transformation with new lobbies for the Star And Celebrity Towers. As well as the completion of the renovations at the high limit areas. On the main casino floor and Epic Tower. The sequential growth in Studio City's property EBITDA the impact of these initiatives. We're firing on all cylinders in Macau. The ongoing strength that we are seeing in our business momentum is a direct result of the combined efforts and contributions of our teams. Are focused on continuing to drive this momentum forward with the highest quality product offerings and a strategic marketing and sales framework. In The Philippines, the heightened competitive environment has had an impact on performances in 1Q twenty twenty five. We're adjusting our cost structure and reviewing our marketing programs to enhance EBITDA contribution from the business. City of Dreams Mediterranean and Cyprus achieved 10% year over year growth in property EBITDA for 1Q twenty twenty five, despite the continued noise in the region.
11m 48s
The property is starting to ramp up and with forward bookings for the upcoming summer period materially higher. Than where than what we had this time last year. We are optimistic about the results that Cypress can deliver over the rest of the year. With that, I turn the call over to Jeff. Thanks, Laurence. Our group wide adjusted property EBITDA for the first quarter of twenty twenty five was approximately $341,000,000 Adjusted for VIP hold, our property EBITDA was approximately $313,000,000 have been highly disciplined in managing our cost base. We brought OpEx down to $3,100,000 per day for the first quarter of twenty twenty five compared to $3,200,000 in the fourth quarter of twenty twenty four. We are continuing to refine our cost base to identify areas increase efficiency and flow through. And as we had previously indicated, we target to exit the second quarter of twenty twenty five with OpEx of $3,000,000 per day.
12m 51s
This excludes costs related to House of Dancing Water and Studio City's residency concerts. Turning to our balance sheet.
12m 59s
Our liquidity position remains robust. We had available liquidity of 3,300,000,000.0 with consolidated cash on hand of approximately $1,200,000,000 as of the end of the first quarter of twenty twenty five.
13m 12s
Melco, excluding its operations at Studio City The Philippines, Cyprus accounted for approximately $662,000,000 of the consolidated cash on hand. We have two bond maturities coming up this year, one in June at Melco and the other in July at Studio City. Both maturities are already covered and will be refinanced with the drawdown withdrawdowns under the respective credit facilities and free cash on hand. We have repurchased approximately 165,000,000 in MLCO ADSs in 2025 as of May 7. The dislocation in the equity markets created a unique opportunity for us to repurchase shares at extremely low valuations. We will continue to review our capital allocation strategy based on our cash availability and market conditions and look to strike a balance between returning capital via buybacks and reducing debt. Our consolidated leverage has improved with the growth in EBITDA and we intend to continue to work on reducing our leverage through EBITDA growth and repayment of debt. As we normally do, we'll give you some guidance on non operating line items for the upcoming second quarter of twenty five. Total depreciation and amortization expense is expected to be approximately 135,000,000 to 140,000,000 Corporate expense is expected to come in at approximately 25,000,000 to 30,000,000 and consolidated net interest expense is expected to be approximately 101 hundred and 25,000,000 This includes finance liability interest of around $7,000,000 relating to fees payable in relation to the Macau gaming concession and the Cypress gaming license.
14m 58s
And finance lease interest of approximately $5,000,000 relating to City of Dreams, concludes our prepared remarks. Operator, back to you for the Q and A. Thank you. You. If you wish to cancel your request, please press 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from George Choi with Citi. Please go ahead.
15m 30s
Congratulations on very solid set of results. I have a couple of questions, if I may. Firstly, I guess this is for Lawrence.
15m 39s
Ever since London La Grande opened fully opened in May, do you guys feel any impact in at City of Dreams And do you feel any change in terms of competition intensity amongst the the six operators?
15m 57s
Hey, George. So maybe I'll I'll I'll start and maybe Evan and others can supplement. But I think your question is, like, ever since London, they were grand, opened in April, have we seen any, increased competition? [indiscernible] No. Look.
16m 16s
I we're very happy with q one. And as I mentioned in the prepared remarks, we've maintained our market share in April And during Golden Week, mass drop at COD was up 20%. So if anything, I think our product have held up very well. And, you know, I think with all the hard work between the teams, as you know, both City of Dreams and Studio City Studio City successfully repositioning, you know, during and post COVID. And city of dreams now reopening house of Dancing Water, I think we found our found our groove again. And, rediscover our our our [indiscernible] And so I I don't think there has been any cannibalization, but don't know. Maybe Evan can supplement No. I I think Lauren said it well. I think we're feeling good in our business and at least as of today. I don't think that we felt that there's been a material impact in terms of that opening and new supply cannibalize any of the business at City of Dreams. 've had fairly good momentum since that period. So at least right now, it doesn't appear to have had an impact.
17m 36s
And I think George as well, I think so far in the market, reinvestment has as we mentioned on the past call, and we hope this continues to hold, is more rational [indiscernible] you know, everybody's all the operators within Macau are more rational now than they were a year ago. And I think that's why, you know, in together with our cost discipline, I think we over we exceeded what we had guided last quarter in terms of operating costs. And as long as I think the whole market you know, everybody is is, you know, behaving, I think we we can continue to, you know, strive for know, a newer goal as well. And, you know, I think post COVID, you know, we started slow, and then last year at a certain time, think even we were we've gone overboard with regards to the reinvestment. I think now that we've we've our identity and know, we offer a premium product. And so we should never be the most competitive and most aggressive in terms of marketing schemes and because at the end of the day, we have you know, probably the two best hotels in Macau. At City of Dreams and, you know, Epic at its Studio City is also an amazing new product.
19m 1s
And so having these great products, having with dancing water, having the family, [indiscernible] other non gaming attractions at Studio City. Those are in our opinion, enough to attract a very broad customer base. So I think know, hopefully, everybody will be disciplined and will continue to you know, focus on on improving our margin. [indiscernible] a lot for the color. I guess switching gear over to Manila. Could you please provide us with any update on the strategic review on City of Grains Vanilla?
19m 45s
Sure, George. So, we continue to run the process with the the advisors. Potential buyers are signing NDAs. In the virtual data room. And are working through a series of questions. And over time, we will whittle down that group to a short list for the bidding process. But we remain in close dialogue with our advisors and we'll come back when there's something to announce.
20m 15s
Thank you very much. I'll jump back to the queue. Thank you.
20m 20s
Your next question comes from Riccardo Cinchilla with Deutsche Bank. Please go ahead.
20m 27s
Hey, guys. Thank you so much taking the question. Congrats on the solid results. I was hoping if you could give us a little bit of color on, you know, what are you seeing very on the gaming floor? Are you guys seeing any sign of weakness from, you know, any of the sets of your database? Or anything that would point out to other than, you know, something changing from the strong results that you guys, commented on April? Ricardo, did you the last part, did you say that Trump what what was the Trump thing? You said?
21m 4s
No. I was not mentioning on Trump. I was mentioning that if you this might be my phone. I apologize. But if you have seen any any sort of weakness in the last couple of weeks, or anything more recent given the macro concerns? With regards to spending in your casino floors or any other you know, indications in your booking patterns, anything that would point out to something changing from the strong results that you saw during the golden week in April?
21m 37s
Oh, so sorry. My my bad. No. So as as we said, April you know, I think post trade war and all of the stuff, April was very strong for us and we were happy with the result. And, as we mentioned, Golden Week, 20%. But I think, furthermore, what I didn't mention is tail the tail was longer this year. Previous year during golden week. And so we're we're we're happy about that, and you know, I right before this call, like, ten minutes ago, I just walked gaming floor city Dreams, for a Thursday night is really, really full. So I don't know know, I think how much of it is an impact from the opening of House of Dancing Water, but I'm sure when we get House of Dancing Water up and running that's two shows a day. 2,000 people per show. That's you know, 4,000 additional hits. Driving into the box. So I think all in all, we're quite happy with it, and you know, even post the whole trade war thing in in April, April held up you know, stronger than we had expected. And as we've always said, Chinese policy is the most important thing.
22m 54s
To us.
22m 54s
Even more important than the Chinese economy. And, you know, Chinese policy right now has been super supportive and is now focusing on increasing domestic consumption. Discretionary spending, and domestic travel. So these are all key criterias for us. So if anything, we're quite, happy with, with what we're seeing in the know, in the past you know, in addition to q one and and so far in q two. I don't know if there is anything anybody wanted to add. No. I I I think Lauren said it well. We were pleasantly surprised. I think there was a question mark in terms of what would happen during [indiscernible] And there were certainly rumors in the marketplace that some of the larger players where we might see some reduction in terms of volume We didn't see that. We had a very solid Golden Week.
23m 44s
And as we move into the post golden week period, as Lawrence articulated, we can't specifically say what it is.
23m 53s
But we're certainly not seeing that sort of [indiscernible] or kind of hangover effect that you get right after the holiday period. We've actually continued to have pretty strong drops here. In the following days. So I think we're feeling pretty good right now about the market.
24m 10s
Perfect. Thank you so much. For my follow-up, could you please give us some guidance on CapEx for the balance of the year or any projects that we should be aware of with regards to CapEx for 2026?
24m 25s
So for 2025, full year CapEx guidance remains unchanged at $415,000,000 And as far as major projects, the only one I'd highlight would be, the completion of Sri Lanka.
24m 44s
Perfect. Thank you so much.
24m 47s
Thank you. Thank you. Your next question comes from Joe Storff with Susquehanna. Please go ahead.
24m 55s
Thank you.
24m 56s
Good morning. Good evening. I wanted to ask on just to follow-up on the daily OpEx in Macau.
25m 6s
I heard your comments obviously that exiting the second quarter you think you'll be around 3,000,000 And I just wanted to confirm that that would include, you know, say, the incremental OpEx from House Dancing Water and any residual from residencies that you know, you would have. And then essentially, within so so largely that obviously would be a third quarter number. But for the second quarter, we still expecting approximately 3.2 or is that going to be a now is that going to be maybe a touch higher? [indiscernible] take the first part of that. The OpEx guidance that we gave excludes both House of Dancing Water and the residency. So those costs would be incremental to the one that we gave the one that was reported. We had brought down OpEx to 3.1 per day excluding those two items. In this first quarter. And the guidance that we given and reiterated is to bring that down to three point zero, not 3.2 in the second quarter and that's still where we're looking to take it.
26m 22s
Got it. Thank you for clarifying that.
26m 26s
And I wanted to ask essentially, you know, maybe quarter to date, you're seeing strength And wondering if if that does include maybe you know, any notable improvement in base mass that you've seen whether it be, you know, in Studio City or elsewhere?
26m 55s
So I I think just across the board, we're getting it's articulated earlier, we're getting increasing drop numbers across the system. And so we're seeing some general strength. I mean, there are some pockets and week to week you have different sort of ups and downs within player categories within the database. We tend to get a lot of our our big player here obviously during holiday periods And then in some of the other periods, it's reverting to more of sort of that middle tier or mass mass. But we're seeing general sort of solid results across in the market right now. Or across both properties.
27m 34s
Got it.
27m 35s
Thanks very much.
27m 36s
Nice quarter. Thank you.
27m 40s
Your next question comes from Praveen Chaudhary with MS. Please go ahead.
27m 47s
Thank you. Congratulations, Laurence.
27m 49s
Jeff, and everybody in the team. Amazing inaugural show of House of Dancing Waters. And also very strong first quarter results. I have two quick questions. The first one is [indiscernible] if we think about the market share and the strength that you have talked about in April and May, and Golden Week has been strong. And and you're also working on sequentially taking down the cost. Would it mean that, you know, hold adjusted EBITDA should be sequentially growing in q two, assuming it doesn't fall off the cliff. Is that is that a fair assumption? That's the first question. And the second question is on Sri Lanka. Just wanted to understand when do we expect potential implication to our P and L assuming it's opening sometime in third quarter? Thank you. Well, maybe the second question first. So we do see some impact to the P and L through [indiscernible] For Sri Lanka. But above the line, we'd anticipate seeing that starting in August of this year. And as far as [indiscernible] Yeah. I I mean, obviously, that's our intention. We're trying to be fairly disciplined in terms of our expense and reinvestment levels. And assuming we can continue to keep the momentum that that would then translate incrementally improved EBITDA.
29m 22s
Great. I mean, I have a follow-up on one other point that you mentioned? $165,000,000 that's a lot of money that you used on buyback. Obviously, we are hoping that deleveraging helps the stock price and equity value. Just to understand, how and when you're going to use a buyback versus versus deleveraging or paying up debt, how should we think about it, please? Thank you.
29m 50s
Hey, Pradeem. Maybe I'll I'll start, and then Jeff can submit. But you know, as we've stated, our main focus in the last couple of years has been on taking down debt and bringing down debt. But at these ridiculous share price levels, it's just kind of a once in a lifetime opportunity. We don't think we'll have this chance ever again. To get to buy shares at these prices. So you know, I think for us, you know, we're always thinking about how to maximize shareholder value. So I think at at the current five, it's you know and and know, it was even in the fours earlier.
30m 31s
For MLCO. But, you know, I think we're hoping that now that the the market has has turned a corner and and hopefully people have more confidence in in gaming stocks. In general. So I don't know. Jeff, you want any to anything to supplement? So, yeah, the debt reduction is still the key priority, but we make specific capital allocation decisions based on a dynamic and changing environment. And right now, we've had, as Lauren said, a tremendous opportunity to buy the shares and create shareholder value through share repurchase. And we'll continue to monitor that going forward. But we still do have a strong inclination to continue to pay down debt over time.
31m 21s
Got it. Very clear. So good result. Great opening of House of Dancing Water and buyback. Everything going the right direction. Congratulations, and thank you.
31m 33s
Thank you, Praveen.
31m 35s
Thank you. Your next question comes from John DeCree with CBRE. Please go ahead.
31m 43s
Hey, everyone. I wanted to circle back to to Golden Week and you know, for us, it was it was a surprise. I think the visitation numbers that we've seen to the upside, obviously. So question is, curious, you have certainly more visibility than we do. But if it was better than expected in terms of visitation to Macau more broadly, And then the follow-up, you've mentioned the table drop at COD, the mass market table drop was quite strong. Curious if you could offer any insights during Golden Week into non gaming spends? Retail and some other things that we kind of look at to gauge the health of the the consumer as well. So any additional color would be helpful. Thanks, guys. [indiscernible] Hey, John. So, you know, Golden Week was visitation was strong. You know, was up 40% year over year. You know? But I think fundamentally, you know, the the market has changed somewhat. And and so I think that's why the attractions, like, people in China nowadays are very much into experiences and you know, in terms of know, what does Little Red Book or you know, having those you know, memories and moments captured.
32m 59s
So I think house of dancing water together with the Studio City attractions makes a huge difference. And if anything, we're very happy with, the fact that I think today we're dominating in Little Red Book from all the House of Dancing Water opening premier and all of that stuff. I think retail has kind of fundamentally changed in our part of the world, whether it's Hainan, Hong Kong, or or Macau.
33m 26s
And so that's probably less compelling now. [indiscernible] but at the same time, know, I think you know, with all the nongaming attractions that we have built years in advance, I think that will that will be great for us going forward.
33m 44s
I I think that's, right. We look. The properties were very active during Golden Week. Across the board. So in terms of activity within the mall and with F and B, strong.
33m 55s
As Lawrence has already said, I think on a relative basis, Studio City from a retail standpoint fares better in this environment. Just because the retail mix in that property, is mass focused and pretty affordable more consumable type items. In terms of COD where it's really targeted at high end luxury retail, that category continues to struggle. I don't think that we're struggling more than other operators, but I think across the board, that area continues to be challenged this year as Lawrence said.
34m 33s
Great. Thanks, guys. I appreciate all that.
34m 37s
Thank you.
34m 37s
Thank you.
34m 39s
There are no further questions at this time. I'll now hand back to Jeannie Kim for closing remarks.
34m 45s
That concludes our conference call today. We look forward to speaking to you next quarter. Thank you.
Key Insights
MLCO reported strong Q1 2025 results, with mass market table drop reaching record highs at City of Dreams and Studio City, and market share increasing from 14.7% in Q4 2024 to 15.7% in Q1 2025, remaining stable in April despite new market supply.
Studio City property EBITDA grew 20% quarter-over-quarter following completion of major renovations, and City of Dreams Mediterranean in Cyprus achieved 10% year-over-year property EBITDA growth in Q1 2025, with forward bookings for summer materially higher than last year.
Group-wide adjusted property EBITDA for Q1 2025 was approximately $341 million ($313 million adjusted for VIP hold), with daily OpEx reduced to $3.1 million and targeted to reach $3.0 million by the end of Q2 2025 (excluding House of Dancing Water and residency concert costs).
MLCO repurchased approximately $165 million in ADSs in 2025 as of May 7, taking advantage of low share prices; management will continue to balance buybacks and debt reduction based on market conditions, with consolidated leverage improving due to EBITDA growth.
Full-year 2025 CapEx guidance remains at $415 million, with the main upcoming project being the completion of Sri Lanka (expected P&L impact starting August 2025); Q2 2025 guidance includes depreciation/amortization of $135–140 million, corporate expense of $25–30 million, and net interest expense of $101–125 million.
