Studio City Casino records first post-Covid operating profit in Q3

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Studio City Casino records first post-Covid operating profit in Q3
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Studio City International Holdings, the Melco-operated integrated resort’s owner, saw a year-on-year lift in takings in part thanks to the opening of Studio City Phase 2 in April. New features include the Studio City Indoor Water Park and a new hotel construction called Epic Tower.

Furthermore, entertainment and tourism revenues have surged across Macau since the relaxation of Covid-19 related restrictions in January 2023. The Chinese special administrative region saw post-pandemic high figures in August although a six-month low was recorded in September.

Studio City sees gaming revenue soar

For the three months to 30 September, Hollywood-themed Studio City’s total operating revenues totalled $137.6m (£111.0m/€128.1m). That compared to a loss of $2.8m in Q3 2022. Studio City generated gross gaming revenues (GGR) of $256.3m and $20.6m for the third quarters of 2023 and 2022.

Cotai’s Studio City’s rolling chip volume was $713.6m compared to $42.1m in Q3 2022. Gaming machine handle was $673.9m, compared with $98.2m. The biggest segment was mass market table games drop, which increased to $809.1m from $61.9m.

Revenue from casino contract was $48.6m for the quarter, compared with revenue from casino contract of negative $18.2m for the third quarter of 2022. Revenue from casino contract is net of gaming taxes and the costs incurred in connection with the on-going operation of Studio City which are deducted by Melco Resorts (Macau) Limited, the property’s gaming operator.

Total non-gaming revenues at the 2,000-room resort were $89.0m, compared with $15.4m in the same period in 2022.

Losses shrink in Q3 at Studio City

Operating income for the third quarter of 2023 was $3.2m, compared with an operating loss of $72.5m in the third quarter of 2022. Studio City saw an operating loss of $18.7m in Q2 2023.

Total operating costs and expenses were $134.4m, which was around double the $69.7m accrued in the same period last year. Outgoings related to general administration, F&B and entertainment were among the areas where expenditure grew most.

Studio City generated adjusted EBITDA of $56.3m, compared with negative adjusted EBITDA of $39.5m in 2022. The change was mainly attributable to the increase in revenue from casino contract and higher non-gaming revenues.

Net loss attributable to Studio City International Holdings for the third quarter of 2023 was $28.4m, compared with net loss of $85.2m in 2022. The net loss attributable to participation interest was $2.7m and $8.0m in the third quarters of 2023 and 2022, respectively.

Other factors affecting earnings included net non-operating expenses of $34.3m, which mainly included interest expenses of $36.4m. These were partially offset by interest income of $2.8m. Depreciation and amortisation costs of $45.4m were recorded in the third quarter of 2023, of which $0.8m was related to the amortisation expense for the land use right.

Melco moves closer to profitability

In a separate release, Melco Resorts & Entertainment, which operates Studio City, moved closer to turning a net profit in Q3. It registered a 320.6% rise in revenue allowing it to slash net loss for the period. Revenue in the three months to 30 September reached $1.02bn, up from $241.8m last year. Casino was the catalyst for this growth at Melco, with revenue here in Q3 jumping 346.2% to $812.1m.