Studio City International Holdings Limited (NYSE: MSC) (“Studio
City” or the “Company”), a world-class integrated resort located in
Cotai, Macau, today reported its unaudited financial results for
the first quarter of 2024.
Total operating revenues for the first quarter
of 2024 were US$150.2 million, compared with total operating
revenues of US$51.5 million in the first quarter of 2023. The
change was primarily attributable to the continued recovery in
inbound tourism during the first quarter of 2024, and the opening
of Studio City Phase 2 in April 2023, which led to an increase in
revenue from casino contract and higher non-gaming revenues.
Studio City Casino generated gross gaming
revenues of US$318.4 million and US$146.7 million for the first
quarters of 2024 and 2023, respectively.
Studio City Casino’s rolling chip volume was
US$525.8 million in the first quarter of 2024 versus US$718.5
million in the first quarter of 2023. The rolling chip win rate was
3.72% in the first quarter of 2024 versus 1.59% in the first
quarter of 2023. The expected rolling chip win rate range is
2.85%-3.15%.
Mass market table games drop increased to
US$923.3 million in the first quarter of 2024, compared with
US$480.6 million in the first quarter of 2023. The mass market
table games hold percentage was 29.5% in the first quarter of 2024,
compared with 24.7% in the first quarter of 2023.
Gaming machine handle for the first quarter of
2024 was US$824.3 million, compared with US$431.7 million in the
first quarter of 2023. The gaming machine win rate was 3.2% in the
first quarter of 2024, compared with 3.8% in the first quarter of
2023.
Revenue from casino contract was US$66.9 million
for the first quarter of 2024, compared with revenue from casino
contract of US$18.7 million for the first quarter of 2023. Revenue
from casino contract is net of gaming taxes and the costs incurred
in connection with the on-going operation of the Studio City Casino
which are deducted by Melco Resorts (Macau) Limited, the gaming
operator of the Studio City Casino (the “Gaming Operator”).
Total gaming taxes and the costs incurred in
connection with the on-going operation of the Studio City Casino
deducted from gross gaming revenues were US$251.5 million and
US$128.0 million in the first quarters of 2024 and 2023,
respectively.
Total non-gaming revenues at Studio City for the
first quarter of 2024 were US$83.3 million, compared with US$32.7
million for the first quarter of 2023.
Operating income for the first quarter of 2024
was US$16.1 million, compared with operating loss of US$26.9
million in the first quarter of 2023.
Studio City generated Adjusted EBITDA(1) of
US$66.2 million in the first quarter of 2024, compared with
Adjusted EBITDA of US$9.1 million in the first quarter of 2023. 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 Limited for the first quarter of 2024 was
US$14.6 million, compared with net loss attributable to Studio City
International Holdings Limited of US$38.0 million in the first
quarter of 2023. The net loss attributable to participation
interest was US$1.4 million and US$3.6 million in the first
quarters of 2024 and 2023, respectively.
Other Factors Affecting
Earnings
Total net non-operating expenses for the first
quarter of 2024 were US$32.0 million, which mainly included
interest expense of US$34.8 million, partially offset by interest
income of US$1.6 million.
Depreciation and amortization costs of US$50.1
million were recorded in the first quarter of 2024, of which US$0.8
million was related to the amortization expense for the land use
right.
The Adjusted EBITDA for Studio City for the
three months ended March 31, 2024 referred to in the earnings
release of Melco Resorts & Entertainment Limited (“Melco”)
dated April 30, 2024 (“Melco’s earnings release”) was US$21.7
million more than the Adjusted EBITDA of Studio City contained in
this press release. The Adjusted EBITDA of Studio City contained in
this press release includes certain intercompany charges that are
not included in the Adjusted EBITDA for Studio City contained in
Melco’s earnings release. Such intercompany charges include, among
other items, fees and shared service charges billed between the
Company and its subsidiaries and certain subsidiaries of Melco.
Additionally, Adjusted EBITDA of Studio City included in Melco’s
earnings release does not reflect certain gaming concession related
costs and certain intercompany costs related to the table games
operations at Studio City Casino.
Financial Position and Capital
Expenditures
Total cash and bank balances as of March 31,
2024 aggregated to US$218.1 million (December 31, 2023: US$228.2
million), including US$0.1 million of restricted cash (December 31,
2023: US$0.1 million). Total debt, net of unamortized deferred
financing costs and original issue premiums, at the end of the
first quarter of 2024 was US$2.34 billion (December 31, 2023:
US$2.34 billion).
Capital expenditures for the first quarter of
2024 were US$10.8 million.
Recent Developments
On April 8, 2024, Studio City Finance Limited
(“Studio City Finance”) announced that it initiated a cash tender
offer for up to an aggregate principal amount of US$100,000,000 of
its outstanding 6.000% senior notes due 2025 (the “Notes” and such
tender offer, the “Tender Offer”). The early tender period expired
on April 19, 2024 (the “Early Tender Date”) and at the Early Tender
Date, valid tenders had been received (and not validly withdrawn)
with respect to US$307,150,000 aggregate principal amount of the
Notes. An aggregate principal amount equal to US$100,029,000 of the
tendered Notes have been accepted by Studio City Finance for
repurchase and cancelled.
Safe Harbor Statement
This press release contains forward-looking
statements. These statements are made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Studio City International Holdings Limited (the “Company”)
may also make forward-looking statements in its periodic reports to
the U.S. Securities and Exchange Commission (the “SEC”), in its
annual report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Statements that are not historical
facts, including statements about the Company’s beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties, and a number
of factors could cause actual results to differ materially from
those contained in any forward-looking statement. These factors
include, but are not limited to, (i) the pace of recovery from the
impact of COVID-19 on our business, our industry and the global
economy, (ii) risks associated with the amended Macau gaming law
and its implementation by the Macau government, (iii) changes in
the gaming market and visitations in Macau, (iv) capital and credit
market volatility, (v) local and global economic conditions, (vi)
our anticipated growth strategies, (vii) gaming authority and other
governmental approvals and regulations, and (viii) our future
business development, results of operations and financial
condition. In some cases, forward-looking statements can be
identified by words or phrases such as “may”, “will”, “expect”,
“anticipate”, “target”, “aim”, “estimate”, “intend”, “plan”,
“believe”, “potential”, “continue”, “is/are likely to” or other
similar expressions. Further information regarding these and other
risks, uncertainties or factors is included in the Company’s
filings with the SEC. All information provided in this press
release is as of the date of this press release, and the Company
undertakes no duty to update such information, except as required
under applicable law.
Non-GAAP Financial Measures
| (1) |
|
"Adjusted EBITDA" is defined as net income/loss before interest,
taxes, depreciation, amortization, pre-opening costs, property
charges and other and other non-operating income and expenses.
Adjusted EBITDA is presented exclusively as supplemental
disclosures because management believes it is widely used to
measure the performance, and as a basis for valuation, of gaming
companies. Management uses Adjusted EBITDA to measure our operating
performance and to compare our operating performance with those of
our competitors. |
| |
|
|
| |
|
The Company also presents Adjusted EBITDA because it is used by
some investors as a way to measure a company’s ability to incur and
service debt, make capital expenditures, and meet working capital
requirements. Gaming companies have historically reported similar
measure as supplements to financial measures in accordance with
generally accepted accounting principles, in particular, U.S. GAAP
or International Financial Reporting Standards. However, Adjusted
EBITDA should not be considered as an alternative to operating
income/loss as an indicator of the Company’s performance, as an
alternative to cash flows from operating activities as measures of
liquidity, or as an alternative to any other measure determined in
accordance with U.S. GAAP. Unlike net income/loss, Adjusted EBITDA
does not include depreciation and amortization or interest expense
and, therefore, do not reflect current or future capital
expenditures or the cost of capital. The Company recognizes these
limitations and uses Adjusted EBITDA as only one of several
comparative tools, together with U.S. GAAP measurements, to assist
in the evaluation of operating performance. |
| |
|
|
| |
|
Such U.S. GAAP measurements include operating income/loss, net
income/loss, cash flows from operations and cash flow data. The
Company has significant uses of cash flows, including capital
expenditures, interest payments, debt principal repayments, taxes
and other recurring and nonrecurring charges, which are not
reflected in Adjusted EBITDA. Also, the Company’s calculation of
Adjusted EBITDA may be different from the calculation methods used
by other companies and, therefore, comparability may be limited.
The use of Adjusted EBITDA has material limitations as an
analytical tool, as Adjusted EBITDA does not include all items that
impact our net income/loss. Investors are encouraged to review the
reconciliation of the historical non-GAAP financial measure to its
most directly comparable GAAP financial measure. Reconciliations of
Adjusted EBITDA with the most comparable financial measures
calculated and presented in accordance with U.S. GAAP are provided
herein immediately following the financial statements included in
this press release. |
| |
|
|
| (2) |
|
“Adjusted net income/loss” is net income/loss before pre-opening
costs and property charges and other, net of participation
interest. Adjusted net income/loss is presented as supplemental
disclosure because management believes it provides useful
information to investors and others in understanding and evaluating
our performance, in addition to income/loss computed in accordance
with U.S. GAAP. Adjusted net income/loss may be different from the
calculation methods used by other companies and, therefore,
comparability may be limited. Reconciliations of adjusted net
income/loss attributable to Studio City International Holdings
Limited with the most comparable financial measures calculated and
presented in accordance with U.S. GAAP are provided herein
immediately following the financial statements included in this
press release. |
About Studio City International Holdings
Limited
The Company, with its American depositary shares
listed on the New York Stock Exchange (NYSE: MSC), is a world-class
integrated resort located in Cotai, Macau. For more information
about the Company, please visit www.studiocity-macau.com.
The Company is majority owned by Melco Resorts
& Entertainment Limited, a company with its American depositary
shares listed on the Nasdaq Global Select Market (Nasdaq:
MLCO).
For the investment community, please
contact:Jeanny KimSenior Vice President, Group
TreasurerTel: +852 2598 3698Email: jeannykim@melco-resorts.com
For media enquiries, please
contact: Chimmy LeungExecutive Director, Corporate
CommunicationsTel: +852 31513765Email:
chimmyleung@melco-resorts.com
| |
|
|
|
|
|
|
Studio City International Holdings Limited and
Subsidiaries |
|
Condensed Consolidated Statements of Operations
(Unaudited) |
|
(In thousands, except share and per share
data) |
|
|
|
|
|
|
|
| |
Three Months Ended |
| |
March 31, |
| |
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
Operating revenues: |
|
|
|
|
|
|
Revenue from casino contract |
$ |
66,887 |
|
|
$ |
18,724 |
|
|
Rooms |
|
38,523 |
|
|
|
12,896 |
|
|
Food and beverage |
|
18,922 |
|
|
|
9,265 |
|
|
Entertainment |
|
8,392 |
|
|
|
1,677 |
|
|
Services fee |
|
12,428 |
|
|
|
6,203 |
|
|
Mall |
|
4,320 |
|
|
|
2,136 |
|
|
Retail and other |
|
685 |
|
|
|
566 |
|
|
Total operating revenues |
|
150,157 |
|
|
|
51,467 |
|
| |
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
Costs related to casino contract |
|
(8,158 |
) |
|
|
(6,859 |
) |
|
Rooms |
|
(11,416 |
) |
|
|
(3,402 |
) |
|
Food and beverage |
|
(17,647 |
) |
|
|
(8,240 |
) |
|
Entertainment |
|
(9,263 |
) |
|
|
(1,393 |
) |
|
Mall |
|
(1,634 |
) |
|
|
(376 |
) |
|
Retail and other |
|
(447 |
) |
|
|
(373 |
) |
|
General and administrative |
|
(35,392 |
) |
|
|
(21,735 |
) |
|
Pre-opening costs |
|
(59 |
) |
|
|
(5,164 |
) |
|
Amortization of land use right |
|
(826 |
) |
|
|
(824 |
) |
|
Depreciation and amortization |
|
(49,296 |
) |
|
|
(29,747 |
) |
|
Property charges and other |
|
60 |
|
|
|
(290 |
) |
|
Total operating costs and expenses |
|
(134,078 |
) |
|
|
(78,403 |
) |
|
Operating income (loss) |
|
16,079 |
|
|
|
(26,936 |
) |
|
Non-operating income (expenses): |
|
|
|
|
|
|
Interest income |
|
1,588 |
|
|
|
2,554 |
|
|
Interest expense, net of amounts capitalized |
|
(34,791 |
) |
|
|
(21,099 |
) |
|
Other financing costs |
|
(104 |
) |
|
|
(103 |
) |
|
Foreign exchange gains, net |
|
1,320 |
|
|
|
3,959 |
|
|
Other income |
|
- |
|
|
|
1 |
|
|
Total non-operating expenses, net |
|
(31,987 |
) |
|
|
(14,688 |
) |
|
Loss before income tax |
|
(15,908 |
) |
|
|
(41,624 |
) |
|
Income tax (expense) benefit |
|
(43 |
) |
|
|
20 |
|
|
Net loss |
|
(15,951 |
) |
|
|
(41,604 |
) |
|
Net loss attributable to participation interest |
|
1,372 |
|
|
|
3,579 |
|
|
Net loss attributable to Studio City International Holdings
Limited |
$ |
(14,579 |
) |
|
$ |
(38,025 |
) |
| |
|
|
|
|
|
|
Net loss attributable to Studio City International Holdings Limited
per Class A ordinary share: |
|
|
|
|
Basic and diluted |
$ |
(0.019 |
) |
|
$ |
(0.049 |
) |
| |
|
|
|
|
|
|
Net loss attributable to Studio City International Holdings Limited
per ADS: |
|
|
|
|
|
|
Basic and diluted |
$ |
(0.076 |
) |
|
$ |
(0.197 |
) |
| |
|
|
|
|
|
|
Weighted average Class A ordinary shares outstanding used in net
loss attributable to Studio City International Holdings Limited per
Class A ordinary share calculation: |
|
|
|
|
|
|
Basic and diluted |
|
770,352,700 |
|
|
|
770,352,700 |
|
| |
|
|
|
|
|
|
Studio City International Holdings Limited and
Subsidiaries |
|
Condensed Consolidated Balance Sheets |
|
(In thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2024 |
|
|
2023 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
217,992 |
|
|
$ |
228,040 |
|
|
Accounts receivable, net |
|
1,974 |
|
|
|
2,281 |
|
|
Receivables from affiliated companies |
|
31,124 |
|
|
|
40,969 |
|
|
Inventories |
|
6,047 |
|
|
|
5,763 |
|
|
Prepaid expenses and other current assets |
|
33,559 |
|
|
|
38,997 |
|
|
Total current assets |
|
290,696 |
|
|
|
316,050 |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
2,734,167 |
|
|
|
2,775,806 |
|
|
Intangible assets, net |
|
- |
|
|
|
5 |
|
|
Long-term prepayments, deposits and other assets |
|
34,273 |
|
|
|
27,787 |
|
|
Restricted cash |
|
129 |
|
|
|
130 |
|
|
Operating lease right-of-use assets |
|
11,595 |
|
|
|
11,619 |
|
|
Land use right, net |
|
104,320 |
|
|
|
105,304 |
|
|
Total assets |
$ |
3,175,180 |
|
|
$ |
3,236,701 |
|
|
|
|
|
|
|
|
|
LIABILITIES, SHAREHOLDERS’ EQUITY AND |
|
|
|
|
|
|
PARTICIPATION INTEREST |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
1,840 |
|
|
$ |
2,454 |
|
|
Accrued expenses and other current liabilities |
|
95,824 |
|
|
|
135,514 |
|
|
Income tax payable |
|
10 |
|
|
|
10 |
|
|
Payables to affiliated companies |
|
18,012 |
|
|
|
18,799 |
|
|
Total current liabilities |
|
115,686 |
|
|
|
156,777 |
|
|
|
|
|
|
|
|
|
Long-term debt, net |
|
2,335,991 |
|
|
|
2,335,173 |
|
|
Other long-term liabilities |
|
3,347 |
|
|
|
3,209 |
|
|
Deferred tax liabilities, net |
|
351 |
|
|
|
309 |
|
|
Operating lease liabilities, non-current |
|
12,472 |
|
|
|
12,250 |
|
|
Total liabilities |
|
2,467,847 |
|
|
|
2,507,718 |
|
|
|
|
|
|
|
|
|
Shareholders’ equity and participation interest: |
|
|
|
|
|
|
Class A ordinary shares, par value $0.0001; 1,927,488,240 shares
authorized; 770,352,700 shares issued and outstanding |
|
77 |
|
|
|
77 |
|
|
Class B ordinary shares, par value $0.0001; 72,511,760 shares
authorized; 72,511,760 shares issued and outstanding |
|
7 |
|
|
|
7 |
|
|
Additional paid-in capital |
|
2,477,359 |
|
|
|
2,477,359 |
|
|
Accumulated other comprehensive losses |
|
(17,864 |
) |
|
|
(12,656 |
) |
|
Accumulated losses |
|
(1,813,262 |
) |
|
|
(1,798,683 |
) |
|
Total shareholders’ equity |
|
646,317 |
|
|
|
666,104 |
|
|
Participation interest |
|
61,016 |
|
|
|
62,879 |
|
|
Total shareholders’ equity and participation interest |
|
707,333 |
|
|
|
728,983 |
|
|
Total liabilities, shareholders’ equity and participation
interest |
$ |
3,175,180 |
|
|
$ |
3,236,701 |
|
|
|
|
|
|
|
|
|
Studio City International Holdings Limited and
Subsidiaries |
|
Reconciliation of Net Loss Attributable to Studio City
International Holdings Limited to |
|
Adjusted Net Loss Attributable to Studio City International
Holdings Limited (Unaudited) |
|
(In thousands, except share and per share
data) |
|
|
|
|
|
|
|
| |
Three Months Ended |
| |
March 31, |
| |
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
Net loss attributable to Studio City International Holdings
Limited |
$ |
(14,579 |
) |
|
$ |
(38,025 |
) |
|
Pre-opening costs |
|
59 |
|
|
|
5,164 |
|
|
Property charges and other |
|
(60 |
) |
|
|
290 |
|
|
Participation interest impact on adjustments |
|
- |
|
|
|
(469 |
) |
|
Adjusted net loss attributable to Studio City International
Holdings Limited |
$ |
(14,580 |
) |
|
$ |
(33,040 |
) |
| |
|
|
|
|
|
|
Adjusted net loss attributable to Studio City International
Holdings Limited per Class A ordinary share: |
|
|
|
|
|
|
Basic and diluted |
$ |
(0.019 |
) |
|
$ |
(0.043 |
) |
| |
|
|
|
|
|
|
Adjusted net loss attributable to Studio City International
Holdings Limited per ADS: |
|
|
|
|
|
|
Basic and diluted |
$ |
(0.076 |
) |
|
$ |
(0.172 |
) |
| |
|
|
|
|
|
|
Weighted average Class A ordinary shares outstanding used in
adjusted net loss attributable to Studio City International
Holdings Limited per Class A ordinary share calculation: |
|
|
|
|
|
|
Basic and diluted |
|
770,352,700 |
|
|
|
770,352,700 |
|
| |
|
|
|
|
|
|
Studio City International Holdings Limited and
Subsidiaries |
|
Reconciliation of Operating Income (Loss) to Adjusted
EBITDA (Unaudited) |
|
(In thousands) |
| |
|
|
|
|
|
| |
Three Months Ended |
| |
March 31, |
| |
2024 |
|
|
2023 |
|
| |
|
|
|
|
Operating income (loss) |
$ |
16,079 |
|
|
$ |
(26,936 |
) |
|
Pre-opening costs |
|
59 |
|
|
|
5,164 |
|
|
Depreciation and amortization |
|
50,122 |
|
|
|
30,571 |
|
|
Property charges and other |
|
(60 |
) |
|
|
290 |
|
|
Adjusted EBITDA |
$ |
66,200 |
|
|
$ |
9,089 |
|
| |
|
|
|
|
|
|
Studio City International Holdings Limited and
Subsidiaries |
|
Reconciliation of Net Loss Attributable to Studio City
International Holdings Limited |
|
to Adjusted EBITDA (Unaudited) |
|
(In thousands) |
| |
|
|
|
|
|
| |
Three Months Ended |
| |
March 31, |
| |
2024 |
|
|
2023 |
|
| |
|
|
|
|
Net loss attributable to Studio City International Holdings
Limited |
$ |
(14,579 |
) |
|
$ |
(38,025 |
) |
|
Net loss attributable to participation interest |
|
(1,372 |
) |
|
|
(3,579 |
) |
|
Net loss |
|
(15,951 |
) |
|
|
(41,604 |
) |
|
Income tax expense (benefit) |
|
43 |
|
|
|
(20 |
) |
|
Interest and other non-operating expenses, net |
|
31,987 |
|
|
|
14,688 |
|
|
Depreciation and amortization |
|
50,122 |
|
|
|
30,571 |
|
|
Property charges and other |
|
(60 |
) |
|
|
290 |
|
|
Pre-opening costs |
|
59 |
|
|
|
5,164 |
|
|
Adjusted EBITDA |
$ |
66,200 |
|
|
$ |
9,089 |
|
| |
|
|
|
|
|
|
Studio City International Holdings Limited and
Subsidiaries |
|
Supplemental Data Schedule |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Three Months Ended |
| |
|
|
|
|
|
March 31, |
|
|
|
|
|
|
|
|
2024 |
|
|
|
2023 |
|
|
Room Statistics: |
|
|
|
|
|
|
|
|
|
Average daily rate (3) |
|
|
$ |
159 |
|
|
$ |
107 |
|
|
|
|
Occupancy per available room |
|
|
96% |
|
|
|
76% |
|
|
|
|
Revenue per available room (4) |
|
$ |
152 |
|
|
$ |
82 |
|
|
|
|
|
|
|
|
|
|
|
|
Other Information: |
|
|
|
|
|
|
|
|
|
Average number of table games |
|
|
246 |
|
|
|
246 |
|
|
|
|
Average number of gaming machines |
|
|
670 |
|
|
|
677 |
|
|
|
|
Table games win per unit per day (5) |
|
$ |
13,031 |
|
|
$ |
5,879 |
|
|
|
|
Gaming machines win per unit per day (6) |
$ |
437 |
|
|
$ |
272 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
(3) |
Average daily rate is calculated by dividing total room revenues
including complimentary rooms (less service charges, if any) by
total occupied rooms including complimentary rooms |
|
(4) |
Revenue per available room is calculated by dividing total room
revenues including complimentary rooms (less service charges, if
any) by total rooms available |
|
(5) |
Table games win per unit per day is shown before discounts,
commissions, non-discretionary incentives (including the
point-loyalty programs) as administered by the Gaming Operator and
allocating casino revenues related to goods and services provided
to gaming patrons on a complimentary basis |
|
(6) |
Gaming machines win per unit per day is shown before
non-discretionary incentives (including the point-loyalty programs)
as administered by the Gaming Operator and allocating casino
revenues related to goods and services provided to gaming patrons
on a complimentary basis |
Studio City (NYSE:MSC)
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From Dec 2023 to Dec 2024
