Studio City International Holdings Limited Announces Unaudited Fourth Quarter 2019 Earnings

By | February 20, 2020

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MACAU, Feb. 20, 2020 (GLOBE NEWSWIRE) — Studio City International Holdings Limited (NYSE: MSC) (“Studio City” or the “Company”), a world-class gaming, retail and entertainment resort located in Cotai, Macau, today reported its unaudited financial results for the fourth quarter and full year ended December 31, 2019.
Total operating revenues for the fourth quarter of 2019 were US$167.8 million, as compared to US$145.2 million in the fourth quarter of 2018. The increase in total operating revenues was mainly due to the increase in revenues from the provision of gaming related services.Revenues from the provision of gaming related services are derived from the provision of facilities for the operations of Studio City Casino by Melco Resorts (Macau) Limited (the “Gaming Operator”), a subsidiary of Melco Resorts & Entertainment Limited (“Melco”) and holder of a gaming subconcession, and services related thereto.Studio City Casino generated gross gaming revenues of US$375.6 million and US$379.4 million for the fourth quarters of 2019 and 2018, respectively. Affected by the Macau market-wide VIP weakness, Studio City’s rolling chip volume was US$2.46 billion for the fourth quarter of 2019 versus US$3.46 billion in the fourth quarter of 2018. The rolling chip win rate was 3.60% in the fourth quarter of 2019 versus 3.82% in the fourth quarter of 2018. The expected rolling chip win rate range is 2.85% – 3.15%.Mass market table games drop increased to US$879.8 million in the fourth quarter of 2019 compared with US$825.4 million in the fourth quarter of 2018. The mass market table games hold percentage was 30.2% in the fourth quarter of 2019 compared to 27.0% in the fourth quarter of 2018.Gaming machine handle for the fourth quarter of 2019 was US$695.4 million, compared with US$641.8 million in the fourth quarter of 2018. The gaming machine win rate was 3.0% in the fourth quarter of 2019 compared to 3.6% in the fourth quarter of 2018.Total gaming taxes and the costs incurred in connection with the operation of Studio City Casino deducted from gross gaming revenues were US$270.3 million and US$290.1 million in the fourth quarters of 2019 and 2018, respectively.Revenues from the provision of gaming related services were US$105.3 million and US$89.3 million for the fourth quarters of 2019 and 2018, respectively. Revenues from the provision of gaming related services are net of gaming taxes and the costs incurred in connection with the operation of Studio City Casino deducted by the Gaming Operator pursuant to the Services and Right to Use Arrangements.Total non-gaming revenues at Studio City for the fourth quarter of 2019 was US$62.5 million, compared with US$55.9 million for the fourth quarter of 2018.Operating income for the fourth quarter of 2019 was US$62.2 million, compared with operating income of US$41.8 million in the fourth quarter of 2018, representing an increase of 49%. Adjusted EBITDA(1) was US$103.3 million for the fourth quarter of 2019, as compared to Adjusted EBITDA of US$85.9 million in the fourth quarter of 2018, representing an increase of 20%. The year-over-year increase in Adjusted EBITDA was mainly attributable to the increase in revenues from the provision of gaming related services.Net income attributable to Studio City International Holdings Limited for the fourth quarter of 2019 was US$20.8 million, compared with net income attributable to Studio City International Holdings Limited of US$1.3 million in the fourth quarter of 2018. The net income attributable to participation interest was US$6.2 million and US$0.9 million in the fourth quarters of 2019 and 2018, respectively.  Other Factors Affecting EarningsTotal net non-operating expenses for the fourth quarter of 2019 were US$35.2 million, which mainly included interest expenses of US$31.5 million.Depreciation and amortization costs of US$40.6 million were recorded in the fourth quarter of 2019 of which US$0.8 million was related to the amortization expense for the land use right.In January 2019, the Gaming Operator informed us via our subsidiary, Studio City Entertainment Limited, that it would cease VIP rolling chip operations at the Studio City Casino on January 15, 2020. In January 2020, we announced the Gaming Operator would continue VIP rolling chip operations at the Studio City Casino until January 15, 2021, subject to termination by 30-day notice. Revenues from provision of gaming related services in relation to the Studio City Casino VIP gaming operations amounted to US$6.7 million in the fourth quarter of 2019, compared with US$8.8 million in the fourth quarter of 2018.The Adjusted EBITDA for Studio City for the three months ended December 31, 2019 referred to in Melco’s earnings release dated February 20, 2020 (“Melco’s earnings release”) is US$14.1 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 costs related to the table games operations at Studio City Casino.Financial Position and Capital ExpendituresTotal cash and bank balances as of December 31, 2019 aggregated US$327.2 million (December 31, 2018: US$377.6 million), including US$27.9 million of restricted cash (December 31, 2018: US$31.7 million). Total debt, net of unamortized deferred financing costs at the end of the fourth quarter of 2019, was US$1.44 billion (December 31, 2018: US$1.61 billion).Capital expenditures for the fourth quarter of 2019 were US$37.8 million.Full Year ResultsFor the year ended December 31, 2019, Studio City International Holdings Limited reported total operating revenues of US$626.7 million versus US$571.2 million in the prior year. The increase in total operating revenues was mainly due to the increase in revenues from the provision of gaming related services.Operating income for 2019 was US$178.0 million, compared with operating income of US$137.9 million for 2018, representing an increase of 29%.Adjusted EBITDA was US$361.0 million for the year ended December 31, 2019, as compared to Adjusted EBITDA of US$314.8 million in 2018, representing an increase of 15%. The year-over-year increase in Adjusted EBITDA was mainly attributable to the increase in revenues from the provision of gaming related services.Net income attributable to Studio City International Holdings Limited for 2019 was US$33.6 million, compared with net loss attributable to Studio City International Holdings Limited of US$21.6 million in 2018. The net income attributable to participation interest was US$10.1 million and US$0.9 million for 2019 and 2018, respectively.Recent DevelopmentsOn February 4, 2020, the Macau government announced all casinos in Macau would be closed for a 15-day period commencing on February 5, 2020. On February 17, 2020, the Macau government announced, subject to the implementation of certain health-related precautionary measures, casinos in Macau may resume operations on February 20, 2020. Gaming operations at Studio City Casino resumed on February 20, 2020.Safe Harbor StatementThis 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 written or oral 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) growth of the gaming market and visitations in Macau, (ii) capital and credit market volatility, (iii) local and global economic conditions, (iv) our anticipated growth strategies, (v) gaming authority and other governmental approvals and regulations, and (vi) 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 earnings before interest, taxes, depreciation, amortization, pre-opening costs, property charges and other, other non-operating income and expenses. We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results. This non-GAAP financial measure eliminates the impact of items that we do not consider indicative of the performance of our business. While we believe that this non-GAAP financial measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for the related financial information prepared in accordance with U.S. GAAP. It should not be considered in isolation or construed as an alternative to net income/loss, cash flow or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities. 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. In addition, the Company’s calculation of Adjusted EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited. 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, property charges and other, loss on extinguishment of debt and costs associated with debt modification, 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 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 LimitedThe Company, with its American depositary shares listed on the New York Stock Exchange (NYSE: MSC), is a world-class gaming, retail and entertainment resort located in Cotai, Macau. For more information about the Company, please visit www.studiocity-macau.com.The Company is strongly supported by its single largest shareholder, Melco Resorts & Entertainment Limited, a company with its American depositary shares listed on the NASDAQ Global Select Market (NASDAQ: MLCO). For investment community, please contact:
Richard Huang
Director, Investor Relations
Tel: +852 2598 3619
Email: richardlshuang@melco-resorts.com
For media enquiries, please contact:
Chimmy Leung
Executive Director, Corporate Communications
Tel: +852 3151 3765
Email: chimmyleung@melco-resorts.com

 
 

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