Melco Q1: ‘We’ve found our groove again’ as revenue grows 10.8% to $1.23bn

Key points:

– Revenue is up 10.8% to $1.23bn, while net income grew exponentially to $27.7m

– Food and beverage, hotel and casino operations all noted revenue growth

– Buyers for City of Dreams Manila are signing NDAs ahead of the bidding process

Melco Resorts & Entertainment has published its Q1 report for the period ending 31 March, 2025.

Revenue increased 10.8% year-on-year to $1.23bn, which was supported by $1.02bn from casino operations.

The latter saw a 12.2% increase, while revenue from the hotel side of the business increased 4.3% to $105.1m.

Food and beverage revenue increased 14.3% to $75.5m, although this was somewhat balanced by a 15.4% drop in entertainment and retail revenue, with this division reporting $27.2m.

Net income saw one of the most drastic changes in the report, with $27.7m this quarter marking a 50x increase compared to the $550,000 net income in Q1 2024.

Adjusted EBITDA noted a 10.2% increase to $312.7m.

Operating income was $144.9m, with the majority of this coming from City of Dreams – which made $137.5m in revenue this quarter.

The rest of the properties reported similar totals as last year, indicating steady business, with the exception being Altira Macau with a $2.4m operating loss.

Melco explains this as due to “softer performance in mass market table games” compared to last year, with the $108.8m in table drop a 22.7% decrease year-on-year.

Lawrence Ho, Melco Chairman and CEO, commented; “Macau property EBITDA grew 32% quarter-on-quarter, demonstrating our strength and growth potential in Macau.

“Mass drop increased each month during the quarter, and we recorded our highest daily mass drop ever.

“The ongoing strength that we are seeing in our business momentum is a direct result of the combined efforts of our teams, and the quality of our product offerings, and we will continue to build on this momentum.”

During the Melco conference call, Ho mentioned that “in the Philippines, the heightened competitive environment has had an impact on performance.”

Later, when talking about the business as a whole bouncing back from the pandemic, he said: “We’ve found our groove again and rediscovered our identity.”

Ho also stipulated that “as long as everyone keeps behaving” in terms of the wider market, he expects the business to continue growing, even without an “aggressive” competitive campaign.

Instead, he hopes the products and properties speak for themselves.

However, when asked about City of Dreams Manila, Geoff Davis VP and CFO, said that “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 shortlist for the bidding process.”

This is perhaps part of Melco’s new strategy that it discussed last month in light of junket restrictions and capital spending.

Good to know: In this quarter, City of Dreams Manila saw the third-highest operating income with $13.5m, with $30.1m in Adjusted EBITDA

Ho continued: “City of Dreams Manila was impacted by the increased competition in the market, while results at City of Dreams Mediterranean and our satellite casinos in Cyprus exhibited solid sequential and year-on-year growth despite the continued challenges posed by the conflicts in the region.

“And finally, the fit-out of the casino at City of Dreams Sri Lanka is progressing well and we continue to expect to commence casino operations in the third quarter of 2025.”