Melco Profit Low for 2017 Despite Revenue Gains

Melco International Development Ltd provided $5 million shares to Lawrence Ho for top performance in 2017. Melco is listed on the Hong Kong stock exchange. The company announced their 2017 financial report last week, with a reported 70% increase in revenue. It means $5.25 billion in revenue. The adjusted earnings also went up 80 percent to HK $9.8 billion. But, if one looks at 2016, the profits were not as high in 2017 as they were the year previous. Profits changed from HK $10 billion to HK $474 million.

Melco International is looking to change Macau landscape, but profit is lower than expected. Melco has tried to make a hold on the Macau market, but certain things have shaken up the company. The lower profits have to do with Melco Crown Entertainment.

Crown Resorts and Melco

James Packer and Melco Crown partnership ended. The Melco Crown Entertainment venture was something of a one-off increase, which is why 2016 profits were extremely high. The joint venture with Crown Resorts, the Australian company, is over. Crown purchased and then canceled the purchase of Melco shares. It has left Melco Resorts and Entertainment with the majority ownership. The company operates in Manila and Macau.

For Melco, the Melco Resorts and Entertainment portion of the company provide most of the revenue seen in 2017. Ho feels that the operations in Macau will provide a better position for the company in the future.

Melco also took part in Melcolot Ltd, which is a lottery, available online. The investment earned them 40.65 percent of the company, with operator in charge. Melco also gained more of a share in Entertainment Gaming Asia, which provides electronic machines to operators based in the Philippine’s. Melco announced the company is working on a social gaming platform in another arm.

All these things are why Ho states the company is taking a larger hold on the Macau market. Melco also has a majority share of City of Dreams Mediterranean. The integrated resort is being created in Cyprus, with the first phase to be completed in 2021. The license to operate is giving Melco temporary gaming facilities in the main resort, which should provide income earlier than previously expected.

Ho said the company is aware of the investors and is looking to make certain they meet investor needs. They also have an eye toward Mainland China’s restrictions to ensure Macau remains a prominent stop for tourists even with stricter regulations.

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