TLDR Seaport Research Partners says selling City of Dreams Manila could help Melco reduce debt Melco’s Manila property beat expectations in the second quarter with property EBITDA up 9% Macau operations stayed under pressure with revenue down about 9% year-on-year Melco’s total debt fell to $7.1 billion from $7.9 billion Cyprus operations saw EBITDA jump 60% year-on-year despite disruption from the Middle East conflict
Melco Resorts & Entertainment could reduce its debt by selling City of Dreams Manila, according to Seaport Research Partners. The brokerage made this assessment even though the Philippine resort posted better-than-expected results in the second quarter.
Senior analyst Vitaly Umansky said Melco’s failed attempt to sell the property last year should not stop the company from trying again. Seaport believes a sale could still create value even at a lower price than what Melco previously wanted.
Melco had explored a sale of its Manila interest before, but no deal was reached. Seaport’s new view suggests that earlier setback should not close the door on another attempt.
Manila Results Beat Expectations
City of Dreams Manila had a stronger quarter than analysts expected. Seaport estimated property EBITDA rose 9% year-on-year.
That gain came alongside weaker VIP numbers. VIP rolling-chip volume dropped 25% from the previous quarter, and a VIP hold rate of 2% weighed on results.
Mass-market gaming volume stayed roughly steady compared with the prior quarter. Seaport expects the Manila property to remain stable overall.
Competition in the Philippine capital is expected to keep pressuring the business. Seaport also said investor interest in the property has stayed limited, viewing it as more of a burden than a benefit for Melco.
Macau Remains Under Pressure
Melco’s total debt stood at $7.1 billion at the end of the second quarter. That is down from $7.9 billion
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