[ad_1]
Melco Crown Entertainment Limited (NASDAQ:MLCO) Fourth Quarter 2022 Earnings Conference Call Transcript March 1, 2023
operator: Ladies and gentlemen, thank you for joining the Melco Crown Entertainment Limited Fourth Quarter 2022 Earnings Conference Call. Today’s meeting is being recorded. I would now like to turn the call over to Ms. Jeanny Kim, Senior Vice President and Group Treasurer, Melco Crown Entertainment Group. please continue.
Jenny King: Thank you, operator, and thank you for joining us today for our fourth quarter 2022 earnings call. On the call were Lawrence Ho, Jeff Davis, Evan Winkler; and our real estate presidents in Macau Manila and Cyprus. Before we begin, please note that today’s discussion may contain forward-looking statements made under the safe harbor provisions of the federal securities laws. Our actual results may differ from those anticipated. Additionally, we may discuss non-GAAP measures. Definitions and reconciliations of each of these measures to the most comparable GAAP financial measure are included in the earnings release. Finally, please note that our supplemental earnings slideshow is posted on our Investor Relations website. With that, I’ll turn the call over to Mr. Lawrence Ho.
He Youlong: Thank you, Jenny. The performance of our Macau properties so far in 2023 is very encouraging. During the peak period of Chinese New Year this year, we saw EBITDA reach 6 million per day and CO GGR surpassed our record during Chinese New Year 2019. Post-Chinese New Year volumes have held up well and our average daily quality volumes in February have been in line with January. Recent performance supports our continued belief in the return of pent-up demand and our view that Macau will continue to develop into a leading international entertainment and leisure destination. I would like to thank the Macau government for granting the gaming franchise the right to continue operating in Macau for the next 10 years.
We greatly appreciate consideration of our recommendations and investment proposals, which we believe will continue to build on our existing strengths in entertainment and non-gaming attractions. We are delighted to be able to deliver on our investment commitments and continue to bring top-notch attractions and facilities to the Macau market. Construction of Phase 2 of Studio City has been completed. The first phase, scheduled to open in the second quarter, will include a hotel tower and what is expected to be the largest indoor water park of its kind in Asia. The remainder of phase two is currently expected to open in the third quarter. In the Philippines, gaming volumes are very close to pre-pandemic levels and we expect to continue to grow as more international tourists enter the country and junket activity increases.
Cyprus has surpassed pre-pandemic volumes and GGR and we are excited about the future as we aim to open City of Dreams Mediterranean in Q2 2023. With that, I turn the call over to Jeff to check some numbers.
Kaspars Grinvalds/Shutterstock.com
Jeffrey Davis: Thanks, Lawrence. For the fourth quarter of 2022, our real estate EBITDA across the group was approximately negative $7 million. Despite all the challenges we face throughout the year due to COVID-related restrictions, our Group Property EBITDA for the full year 2022 is slightly above breakeven. This reflects the strength of our diverse portfolio of integrated resorts. Luck-adjusted Groupwide Real Estate EBITDA for the fourth quarter of 2022 was negative $4 million. Favorable VIP win rates positively impacted COD Macau and Cyprus’s EBITDA by nearly $8 million, while unfavorable win rates negatively impacted COD Manila by approximately $10 million. COD Manila was also impacted by approximately US$6 million in one-time charges.
Our operating expenses from Macau in the fourth quarter of 2022 were approximately US$1.7 million per day, a slight increase from US$1.6 million per day in the third quarter of 2022, but in line with previous quarters. As you may recall, our operating expenses per day in Q3 2022 benefited from 2 weeks of casino closures. We will continue to focus on cost containment as traffic increases. Turning to our cash and liquidity. As of December 31, 2022, we had nearly $2 billion of consolidated cash on hand. Melco, excluding its Studio City, Philippines and Cyprus operations, had revenue of about $1.2 billion. Of this, approximately US$176 million is restricted, including the cash collateral required to provide concession-related guarantees to the Macau government. About $50 million in restricted cash was released in January.
By the end of the fourth quarter, we had fully leveraged RCF to fund commitments under our gaming franchises. In January, Melco International repaid the entire $200 million it had drawn down in 2022 under an intercompany loan with Melco Crown Resorts. Since December 31, 2022, we have reduced leverage by approximately $500 million by repaying amounts drawn under our revolving credit facility. As usual, we’ll provide some guidance on non-operating items for the upcoming first quarter of 2023. Total depreciation and amortization charges are expected to be approximately $125 million and corporate expenses are expected to be approximately $20 million. Consolidated net interest expense is expected to be approximately US$100 million to US$105 million, which includes approximately US$5 million to US$10 million of finance lease interest and approximately US$15 million to US$20 million of capitalized interest related to City of Dreams Manila.
This concludes our prepared remarks. Operator, back to your question-and-answer session. Operator, as soon as you’re ready, we can begin the question-and-answer session.
see also 16 Profitable, High-Growth Non-Tech Stocks and 11 high-growth UK stocks to buy.
To continue reading the Q&A session, please Click here.
[ad_2]
Source link