Melco Resorts & Entertainment Limited Q1 FY2026 earnings call

Lawrence mentioned strong first quarter performance with Macau GGR growth, announcement of REM luxury hotel at COD to launch in third quarter, retail area refresh and food and beverage offering enhancement at COD. In Philippines, despite competitive pressures, property EBITDA and GGR grew. Cyprus operations improved post-Middle East conflict. Sri Lanka casino operations had positive EBITDA. Purchased trademarks for full IP control. Jeff discussed group-wide adjusted property EBITDA, favorable win rates impact, OPEX in Macau, balance sheet liquidity, share repurchases, new share repurchase program, acquisition of trademarks and second quarter non-operating line item guidance.

Group property EBITDA and Macau property EBITDA grew by 12% year-over-year. Macau GGR increased by approximately 10% year-over-year with solid growth across all segments. In the Philippines, property EBITDA for the first quarter of 2026 grew 24% year-over-year while GGR increased 9%. City of Dreams Mediterranean and satellite casinos in Cyprus were impacted by Middle East conflicts but saw significant improvements in occupancy, visitation, and play levels in April. Casino operations in Sri Lanka recorded positive EBITDA in 1Q2026. COD Macau and COD Manila had favorable win rates positively impacting property EBITDA by approximately 20 million and 5 million respectively. Group-wide adjusted property EBITDA for the first quarter of 2026 grew 12% year-over-year to approximately $381 million. Adjusted for VIP hold, property EBITDA was approximately $356 million. Macau property EBITDA margin increased to approximately 28%. Liquidity position remains robust with available liquidity of approximately 2.4 billion and consolidated cash on hand of approximately 1.1 billion as of the end of the first quarter of 2026. Purchased the subsidiary of Melco International owning trademarks, giving full control of IP and immediate increase in EBITDA and cash flow.

Total depreciation and amortization expense is expected to be approximately $140 to $145 million for the upcoming second quarter of 2026. Corporate expense is expected to come in at approximately $30 million. Consolidated net interest expense is expected to be approximately $115 to $120 million. Group does not have any material debt maturities in 2026. REM opening in Q3 will bring approximately $30,000 to $40,000 a day in additional operating expenses.

City of Dreams Mediterranean and satellite casinos in Cyprus impacted by Middle East conflicts. Intense market competition. Uncertainty in VIP business. Potential changes in trademark license agreements. External factors like Middle East situation affecting business.

Q: George Choi asked about OPEX plan and upcoming May Golden Week.

A: Lawrence said May Golden Week has seen improved occupancy and player quality due to less international travel from China because of Middle East conflict. Evan and Jeff elaborated on OPEX being stable, with typical salary increase in April, slight enhancement in suite product service amenities, and REM opening in Q3 bringing additional $30,000 to $40,000 daily operating expenses.

Q: Carl Choi asked about dividend timing and competition response.

A: Goal is to resume dividend by year end, dependent on various variables. On competition, feel stable relative to competitors, excited about REM suite product and retail and food and beverage improvements at COD.

Q: DS Kim asked about Macau government fund participation.

A: What was committed for license renewal in 2022 remains, no change to that amount.

Q: George Choi asked about disruption in COD retail refresh.

A: Already started remodeling, phased plan in place to minimize disruption, zoning zone by zone, working with tenants to keep old friends and bring new exciting brands.