In a consequential development for the casino industry, Melco Resorts & Entertainment is poised for a significant financial rebound with projections indicating a substantial increase in earnings before interest, taxes, depreciation, and amortization (EBITDA). This escalation in earnings is forecasted to drive down the company’s leverage to pre-pandemic levels over the coming one to two years.
The recovery’s momentum is fueled by Melco’s strategic positioning and growing appeal among mass-market patrons within the bustling gaming hub of Macau. An S&P Global Ratings report heralds Melco’s progress, highlighting the robust 22% hike in the mass gross gaming revenue (GGR) during the recent Chinese New Year festivities—a notable uptick compared to 2019 figures. This success is attributed to the influx of Chinese tourists, buoying the company’s financial prospects.
Throughout the trying times of the COVID-19 pandemic, like its peers, Melco was compelled to incur substantial debt to preserve its viability amidst the global health crisis. Despite this backdrop, Melco, and other operators, seem to possess the fiscal resilience to meet pending financial obligations, even as industry-wide debt reduction appears to lag.
Melco’s current credit standing is rendered by S&P with a “BB-” rating and the prospect of a future upgrade, signifying potential recovery albeit within the realms of non-investment grade status. Nevertheless, despite the general unease concerning credit assessments, the vitality of Macau’s gaming debts draws the attention of international investors scouting for lucrative opportunities within China’s complex high-yield market.
On the ground, the first two months of 2024 have been promising, with Macau’s mass GGR already leaping towards the upper bounds of projected annual growth. Melco’s robust balance sheet, flaunting over a billion dollars in liquidity with no immediate debts maturing, further solidifies their standing.
The surge in mass-market gaming revenue is pivotal for two main reasons. Firstly, it relates directly to a boon in operator profits within this segment. Moreover, the VIP segment of Macau’s gaming industry is yet to fully resuscitate from the pandemic’s impact, making mass-market gains all the more significant for Melco’s bottom line.
Reflecting on the array of positive factors, S&P anticipates Melco’s EBITDA to closely echo 2019’s performance through 2024 and outpace it the following year. Such optimistic projections underscore Melco’s resilience and strategic foresight in navigating through a highly transformative period for the global gaming industry.
While the news of Melco’s financial resurgence is certainly noteworthy, it also brings to mind the broader landscape of gaming which has expanded beyond the glitzy floors of Macau’s casinos to the digital world. Online casinos now offer the thrills of high-stakes games from the comfort of one’s home, appealing to a vast audience seeking the convenience and diversity of virtual gaming platforms.
In line with the contemporary shift towards online recreation, we at West Island Blog have compiled a comprehensive guide to the premier online casinos available this month, ensuring that gaming enthusiasts can easily locate a reputable and thrilling online casino experience. For those in Canada actively searching for the best virtual tables and slot machines, peruse our top selections of online casinos and dive into a world of online gaming that promises both entertainment and potential rewards.
