Studio City Announces Earnings Release Date: A Look into the Integrated Resort's Financial Performance

Studio City International Holdings Limited (NYSE: MSC), a world-class integrated resort located in Cotai, Macau, has announced the release date for its unaudited financial results for the fourth quarter and year ended December 31, 2024. The earnings release is scheduled for Thursday, February 27, 2025. As investors and stakeholders await the financial performance update, let's delve into the key factors driving Studio City's growth and the challenges it faces in the dynamic gaming industry and global economic climate.



Key Factors Driving Studio City's Growth

1. Macau Gaming Market and Visitations: The Macau gaming market is a significant driver of Studio City's growth. However, the market has been impacted by global economic conditions, particularly the COVID-19 pandemic, which led to a decline in visitations and gaming revenue. In 2020, Macau's gaming revenue dropped by 79.3% year-on-year due to the pandemic (Source: DICJ). Studio City's financial results have been impacted by the market's performance, with the company reporting a net loss of US$11.2 million in the first quarter of 2024, primarily due to the impact of COVID-19 on its business (Source: Studio City's Q1 2024 Earnings Release).
2. Global Economic Conditions: Global economic conditions, such as capital and credit market volatility, can impact Studio City's growth and financial performance. In 2020, the global economic downturn due to the COVID-19 pandemic led to market uncertainty and volatility, which may have affected Studio City's ability to raise capital or secure financing. However, Studio City successfully issued new senior notes in 2020 and 2021, indicating that it was able to access capital markets despite the challenging economic conditions.
3. Implementation of the Amended Macau Gaming Law: The amended Macau gaming law, which came into effect in 2022, introduced new regulations and requirements for gaming operators, including stricter capital requirements and a more competitive licensing process. Studio City, as a concessionaire, had to comply with these new regulations, which may have impacted its growth and financial performance. In 2022, Studio City successfully obtained a new gaming concession under the amended law, demonstrating its ability to adapt to the new regulatory environment.

Financial Strategy for Long-term Success and Resilience

Studio City employs a strategic approach to financial management, focusing on debt management and capital expenditure, which contributes to its long-term success and resilience.

1. Debt Management: Studio City has diversified its funding sources, including senior notes and credit facilities, to ensure financial flexibility. For instance, it has issued senior notes such as the 2025 Studio City Finance Notes (US$500M, 6.00% due 2025), 2028 Studio City Finance Notes (US$500M, 6.50% due 2028), and 2029 Studio City Finance Notes (US$1.1B, 5.00% due 2029) (Source: Exhibit 99.1, Exhibit 99.2). The company has also consistently reduced its debt levels, redeeming the 2020 Notes (US$825M) and 2024 Notes (US$600M) through tender offers (Source: Exhibit 99.1).
2. Capital Expenditure: Studio City consistently invests in Property, Plant & Equipment (PPE) to maintain and upgrade its integrated resort facilities. As of December 31, 2021, its PPE, net of depreciation, amounted to HK$17,444M (Source: Exhibit 99.1). The company has also undertaken expansion and renovation projects to enhance its offerings and attract more visitors, such as the development of the Studio City Phase 2 project, which includes additional hotel rooms, retail space, and entertainment facilities (Source: Studio City's Annual Report 2021).

In conclusion, Studio City's financial performance and market position have evolved over the past year, with the company reporting increased revenue and EBITDA, and a narrowing of losses. The company's growth is driven by the Macau gaming market and visitations, which have been impacted by the global economic climate and the implementation of the amended Macau gaming law. Studio City's strategic approach to financial management, focusing on debt management and capital expenditure, contributes to its long-term success and resilience. As investors and stakeholders await the company's earnings release on February 27, 2025, they can expect a comprehensive update on Studio City's financial performance and future growth prospects.