Melco Resorts Q4 Revenues Rise Amid Improved Performance In All Gaming Segments: Details

Melco Resorts & Entertainment Limited (MLCO) reported a strong fourth quarter of 2024, with total operating revenues increasing by approximately 9% year-over-year to US$1.19 billion. The company's improved performance across all gaming segments and non-gaming operations contributed to this growth. In this article, we will delve into the key factors driving Melco Resorts' Q4 revenues and the implications for the company's future cash flow and profitability.



Key Factors Driving Q4 Revenue Growth

1. Improved performance in all gaming segments: Melco Resorts' total operating revenues increased by approximately 9% year-over-year, primarily due to improved performance across all gaming segments and non-gaming operations. This broad-based recovery and growth indicate a strong overall performance for the company.
2. Strong performance in City of Dreams: The City of Dreams property contributed significantly to the overall revenue growth. In the fourth quarter of 2024, total operating revenues at City of Dreams were US$591.1 million, compared with US$559.8 million in the fourth quarter of 2023. This represents a year-over-year increase of 5.6%. The property generated Adjusted EBITDA of US$140.1 million, despite higher operating costs due to increased staffing levels to enhance service quality and improve performance.
3. Growth in rolling chip volume and mass market table games drop: The rolling chip volume at City of Dreams increased to US$6.24 billion in the fourth quarter of 2024, compared to US$5.19 billion in the fourth quarter of 2023. Additionally, the mass market table games drop increased to US$1.53 billion in the fourth quarter of 2024, compared with US$1.44 billion in the fourth quarter of 2023. These increases indicate stronger demand and higher customer spending at the property.
4. Expansion of non-gaming revenue: Total non-gaming revenue at City of Dreams in the fourth quarter of 2024 was US$85.6 million, compared with US$80.1 million in the fourth quarter of 2023. This represents a year-over-year increase of 6.9%. The growth in non-gaming revenue contributes to the company's overall growth strategy by diversifying its revenue streams and attracting a broader range of customers.



Implications for Future Cash Flow and Profitability

The increase in Adjusted Property EBITDA indicates that Melco Resorts has been able to improve its operating efficiency and generate more cash from its properties. This improvement can be attributed to the company's strategic initiatives to enhance the customer experience and build a stronger foundation for growth, as mentioned by Lawrence Ho, the Chairman and CEO.

The increase in Adjusted Property EBITDA has positive implications for the company's future cash flow and profitability. As Melco Resorts continues to improve its operating efficiency and generate more cash from its properties, it can reinvest this cash into new projects and expansions, such as the development of the casino at City of Dreams Sri Lanka, which is expected to commence operations in the third quarter of 2025. This reinvestment can lead to further growth and increased profitability for the company in the long run.

Moreover, the improvement in Adjusted Property EBITDA can also help Melco Resorts reduce its leverage and improve its debt-to-EBITDA ratio, as mentioned in the Fitch Ratings report. This can enhance the company's financial stability and make it better positioned to weather any future economic downturns or market fluctuations.

In conclusion, Melco Resorts' Q4 revenues rose amid improved performance in all gaming segments, driven by key factors such as the strong performance of the City of Dreams property, growth in rolling chip volume and mass market table games drop, and expansion of non-gaming revenue. The increase in Adjusted Property EBITDA has positive implications for the company's future cash flow and profitability, as it can reinvest the generated cash into new projects and expansions, leading to further growth and improved financial stability.