{"id":313126,"date":"2024-03-05T14:25:30","date_gmt":"2024-03-05T20:25:30","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=313126"},"modified":"2024-03-06T11:53:58","modified_gmt":"2024-03-06T17:53:58","slug":"melco-resorts-can-make-progress-on-deleveraging-says-sp","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/melco-resorts-can-make-progress-on-deleveraging-says-sp\/","title":{"rendered":"Melco Earnings Growth Can Aid Debt Reduction"},"content":{"rendered":"

Melco Resorts & Entertainment (NASDAQ: MLCO) is likely on pace to grow earnings before interest, taxes, depreciation, and amortization (EBITDA). That should be enough going forward to reduce leverage over the next year to two years to levels last seen before the coronavirus pandemic.<\/p>\n

\"Melco
Melco Resorts CEO Lawrence Ho. S&P Global Ratings says the casino operator can make progress on deleveraging this year. (Image: Bloomberg<\/em>)<\/figcaption><\/figure>\n

In a new report, S&P Global Ratings said the pace of Macau\u2019s 2024 recovery to date is at least in line with expectations. Melco has earnings momentum as it gains share among mass-market visitors to the gaming enclave, the report said.<\/p>\n

MLCO’s EBITDA recovery could accelerate in the coming quarters. Solid mass gaming trends and incremental contributions from Studio City Phase 2 will likely support this. During the recent Chinese New Year holiday, the company’s mass GGR was up 22% from 2019 levels, as the company benefited from Chinese arrivals,\u201d<\/strong> according to the research firm.<\/p><\/blockquote>\n

Like the other Macau concessionaires, Melco took on large amounts of debt during the COVID-19 crisis simply to stay afloat. Market observers believe the operators can handle obligations coming due this year and in 2025. But they also see debt-reduction efforts as sluggish<\/a>.<\/p>\n

Momentum for Melco<\/h2>\n

S&P Rates Melco \u201cBB-\u201c with a \u201cpositive\u201d outlook. That\u2019s a junk rating \u2013 a status shared by several of the other Macau casino operators.<\/p>\n

\n

Despite broadly low credit ratings, Macau gaming debt has been popular<\/a> among global investors seeking alternatives in China\u2019s often volatile high-yield credit market. That indicates professional market participants are confident the gaming companies can handle interest payments. Gross gaming revenue (GGR) figures support that thesis.<\/p>\n<\/div>\n

\u201cWe estimate Macao’s mass gross gaming revenue (GGR) was up 12%-13% from 2019 levels in the first two months of 2024. This trends at the higher end of our 5%-15% growth forecast for 2024, compared with 2019 levels,\u201d added S&P<\/p>\n

Specific to Melco, the City of Dreams operator has more than $1 billion in cash on hand and no debt maturing before 2025.<\/p>\n

Other Positive Factors for Melco<\/h2>\n

Melco\u2019s ability to gain share among mass-market bettors is crucial for two reasons. First, operators\u2019 profits from that segment are surging. Second, Macau\u2019s VIP market still hasn\u2019t recovered in earnest from the pandemic and the splintered junket industry.<\/p>\n

\n

S&P noted Macau mass-market GGR was up 12% to 13% from 2019 levels in the first two months of this year. That\u2019s at the higher end of the ratings agency\u2019s 5% to 15% growth forecast for 2024. Melco\u2019s EBITDA momentum reflects that growth.<\/p>\n<\/div>\n

\u201cMLCO\u2019s property EBITDA was also higher than 2019 levels in that period. Our base case assumes the company’s EBITDA will be 94% of 2019 levels in 2024 and 7% higher than 2019 levels in 2025. This compares with about a 75% level in the fourth quarter of 2023,\u201d concludes S&P.<\/p>\n","protected":false},"excerpt":{"rendered":"

Melco Resorts & Entertainment (NASDAQ: MLCO) is likely on pace to grow earnings before interest, taxes, depreciation, and amortization (EBITDA). That should be enough going forward to reduce leverage over the next year to two years to levels last seen before the coronavirus pandemic. In a new report, S&P Global Ratings said the pace of […]<\/p>\n","protected":false},"author":46,"featured_media":228256,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,10],"tags":[81913,81903],"acf":[],"yoast_head":"\nMelco Resorts Can Make Progress On Deleveraging, Says S&P<\/title>\n<meta name=\"description\" content=\"Melco Earnings Growth Can Aid Debt Reduction.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/melco-resorts-can-make-progress-on-deleveraging-says-sp\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Melco Resorts Can Make Progress On Deleveraging, Says S&P\" \/>\n<meta property=\"og:description\" content=\"Melco Earnings Growth Can Aid Debt Reduction.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/melco-resorts-can-make-progress-on-deleveraging-says-sp\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2024-03-05T20:25:30+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-03-06T17:53:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/LH2-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/melco-resorts-can-make-progress-on-deleveraging-says-sp\/\",\"url\":\"https:\/\/www.casino.org\/news\/melco-resorts-can-make-progress-on-deleveraging-says-sp\/\",\"name\":\"Melco Resorts Can Make Progress On Deleveraging, Says S&P\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/melco-resorts-can-make-progress-on-deleveraging-says-sp\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/melco-resorts-can-make-progress-on-deleveraging-says-sp\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/LH2-1.jpg\",\"datePublished\":\"2024-03-05T20:25:30+00:00\",\"dateModified\":\"2024-03-06T17:53:58+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Melco Earnings Growth Can Aid Debt Reduction.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/melco-resorts-can-make-progress-on-deleveraging-says-sp\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/melco-resorts-can-make-progress-on-deleveraging-says-sp\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/melco-resorts-can-make-progress-on-deleveraging-says-sp\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/LH2-1.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/LH2-1.jpg\",\"width\":1200,\"height\":800,\"caption\":\"Melco Resorts CEO Lawrence Ho. 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