2021-09-06-港交所-美高梅中国_MGM_CHINA_N2405_MGM_CHINA_N2605_MGM_CHINA_N2506_MGM_CHINA_N2702_2021_中期报告_93页_2mb

Summary of 2021 Interim Report

Company Information

• Company: Melco Resorts China Holdings Limited, incorporated in the Cayman Islands, operates leading integrated resort developer, owner, and operator in Macau, focusing on casinos, hotels, and entertainment.
• Management Team: Board includes Chairman William Joseph Hornbuckle and Co-chairman Teresa Leung. Key executives include senior executives from Melco Resorts International (MRIH), a major shareholder.
• COVID-19 Impact: The pandemic severely affected operations from Feb 2020, leading to closedowns of Macau Melco and Melco Mania. Since Jun 2020, visitor numbers and business volumes gradually recovered but remain affected by travel restrictions and health measures. The company implemented measures to reduce costs, including revision of financing agreements and voluntary unpaid leaves.

Financial Summary

• Key Financial Indicators: For half-year 2021, casino revenue (unaudited) was HKD 4.133 billion, up 102.1% year-on-year, driven by resumption of tourism controls and business recovery. Operating revenue increased 98.7%, but the company reported a net loss of HKD 173.3 million, reflecting ongoing COVID-19 challenges.
• Adjusted EBITDA: Positive at HKD 200.4 million (2020: negative HKD 1.008 billion), indicating improved operational efficiency compared to FY2020.
• Loan Facility: Increased borrowings, with HKD 111.1 billion available under credit facilities to support liquidity.

Management Discussion and Analysis

• Business Overview: Melco operates Macau Melco and Melco Mania, focused on high-end casino operations, hotel accommodations, and non-gambling activities like retail, dining, and cultural events. The company emphasizes GGR expansion in main-floor and VIP segments.
• Recent Developments: COVID-19 remains a major challenge, reducing visitor traffic by mid-June 2021 (>40% YoM decline in Mainland visitor numbers). Key strategies include hygiene measures, digital promotions, and sustainability investments. Capital expenditures delayed to preserve cash flow.
• Competitive Advantages: Strong partnerships (with Melco Resorts International), diversified portfolio, and focus on mid-to-high-end market. Debts structured for flexibility, with extended credit facilities.
• Segment Analysis: One reportable segment aggregating Macau Melco and Melco Mania due to similar operations and regulatory environments. Operating performance driven by entertainment business, with continued focus on non-gambling revenue streams like hotels and dining.

Other Information

• Dividends: No mid-term dividend proposed for H1 2021.
• Directors' and Executives' Interests: Significant shareholdings led by Melco Resorts International (55.95% stake) and Teresa Leung (22.49%). Equity movements include exercised share options and share buybacks.
• Financial Flexibility: Capital structure shows high leverage (86% capital-to-debt ratio) but supported by ample liquidity. No major litigation deemed material to operations.

Financial Statements Summary

• Key Highlights: Operating losses decreased due to business resumption but remain negative HKD 1.73 billion. Cash flow used in operations reflects the ongoing recovery challenges, with an emphasis on strategic investments in high-growth areas. Audited financials show robust liquidity and debt management.