Melco reduces daily costs to $1.5m
Melco Resorts and Entertainment Ltd says the daily operating costs for its venues for the second quarter were close to $1.5m.
The group had been trying to bring down costs for some time now, reducing figures to $2.5m in May, compared to the $3m before the coronavirus pandemic, then lowering the sum further to $2.2m.
Melco stated: “During the second quarter of 2020, our average daily operating costs were approximately $1.5m, reflecting a decrease from the run-rate levels in the first quarter of 2020.”
It is unknown if the stated expenses include additional venues not directly under the group, such as Studio City (the casino’s operator SCIHL revealed daily costs for the venue are close to $700,000) or City of Dreams Manilla.
Melco says it has taken “various mitigating measures to manage through the current COVID-19 outbreak challenges, such as implementing a cost reduction program to minimise cash outflow of non-essential items and rationalising our capital expenditure program with deferrals and reductions which benefits our balance sheet.”
The daily costs were revealed as part of the $500m senior notes offer due in 2028, which the group announced earlier this week.
With travel restrictions lifting in Macau, analysts predict the city’s gaming industry could reach 25% of 2019 levels; this might offset the costs Melco is experiencing.
So far, the group has faced declining profits, with $964m in gross gaming revenue (a 40% drop) and adjusted property EBITDA falling 82% to $75m for Q1 2020.
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