Q4 2023 Melco Resorts & Entertainment Ltd Earnings Call

Operator: Ladies and gentlemen, thank you for participating in the fourth quarter 2023 earnings conference call of Melco Resorts and Entertainment Ltd. At this time, all participants are in a listen-only mode. After the call, we will conduct a question and answer session. Today's conference is being recorded. I would now like to turn the call over to Ms. Jeanny Kim, Senior Vice President, Group Treasurer of Melco Resorts and Entertainment Ltd. Thank you,

Ladies and gentlemen, thank you for participating in the fourth quarter of 2023 and in this conference call of now could result Entertainment limited at this time, all participants listen only mode. After the cool we will conduct.

A question and answer session today's conference is being recorded.

Speaker Change: I'd like to turn the call over to Mister <unk>.

Vice President group treasure out of Malka resort and Entertainment limited.

Mister <unk>: Thank you operator, and thank you all for joining us today for our fourth quarter of 2023 earnings call on the call or Lawrence, how Jeff Davis Urban Winkler and our property President's in Macau Manila Cypress before we get started please note that today's discussion may contain forward looking statements made under the safe.

Jeanny Kim: And thank you all for joining us today for our fourth quarter 2023 earnings call. On the call are Lawrence Ho, Jeff Davis, Evan Winkler, and our property presidents in Macau, Manila, and Cyprus. Before we get started, please note that today's discussion may contain forward-looking statements made under the Safe Harbor provision of federal securities laws. Our actual results may differ from our anticipated results. In addition, we may discuss non-GAAP measures. The definition and reconciliation of each of these measures to the most comparable GAAP financial measures are included in the earnings release.

Mister <unk>: Provision of Federal Securities laws are actual results may differ from our anticipated results.

Mister <unk>: We may discuss non-GAAP measures the definition and reconciliation of each of these measures within those comparable GAAP financial measures.

Mister Lollipop: <unk> and the earnings release finally, please note that our supplementary earning slides are posted on our Investor relations website with that I'll turn it over to Mister Lollipop.

Jeanny Kim: Finally, please note that our supplementary earnings slides are posted on our investor relations website. With that, I'll turn it over to Mr. Lawrence Ho. Thank you, Jeanny, and thank you for joining us today.

Lollipop: And thank you for joining us today.

Lawrence Ho: Many of you may already be aware that David Sisk, our COO of Macau, has resigned. We will be conducting a thorough search process to identify and appoint a high-caliber individual to steer our business forward in Macau. In the interim, Ev and I will be actively involved in the day-to-day operations of our Macau property. As we move forward, our focus is to ensure that Melco is leading the market in all aspects of our business through innovation and collaboration. With this in mind, we're also adding to our leadership team with new appointments in gaming operations, retail, hotels, and food and beverage. We expect these new additions to the leadership team and management changes will strengthen us as a team to secure a stronger and more competitive future. Turning back to our results, Macau continues to demonstrate its extraordinary growth potential and has shown resilience despite China's uncertain macroeconomic outlook. Visitation to Macau during this month's Chinese New Year holiday period was close to the 2019 level, and the number of visitors from China exceeded 2019.

Lollipop: Many of you may already be aware that David <unk> Macau has resigned.

Mister Lollipop: Will be conducting a thorough search process to identify and appoint a high caliber individuals to steer our business forward in the account.

In the interim <unk> will be actively involved in the day to day operations with all in Macau properties.

Mister Lollipop: As we move forward our focus is to ensure that milk who's leading the market in all aspects of our business through innovation and collaboration.

Mister Lollipop: With this in mind, we're also adding to our leadership team with new appointments and gaming operations retail hotels and food and beverage.

Mister Lollipop: We expect these new additions to the leadership team and management changes will strengthen us as a team to secure a stronger and more competitive future.

Mister Lollipop: Turning back to our results.

Mister Lollipop: <unk> continues to demonstrate his extraordinary growth potential and has shown resilience despite china's uncertain macroeconomic outlook.

Mister Lollipop: Visitation to Macau during this month's Chinese new year holiday period. It was close to 2019 levels and the number of visitors from China exceeded 2019.

Lawrence Ho: Our mass GGR and Macau Theo property EBITDA during this CNY holiday period was meaningfully higher than 2019 levels. 2023 was a year of post-pandemic recovery and the opening of new properties, the City of Dreams Mediterranean and Studio City Phase II. The epic hotel tower at Studio City Phase 2 offers our patrons a luxury hotel product which had not been available at Studio City before, with two 3-bedroom suites and villas.

Mister Lollipop: A mass G. G R in Macau Theo property EBITDA during the C N Y holiday period with meaningfully higher than 2019 levels.

Mister Lollipop: 2023 was a year of post pandemic recovery and the opening of new properties the city of dreams Mediterranean in studio City phase too.

Mister Lollipop: The ethic hotel tower, it's too soon.

Mister Lollipop: Studio City Phase two offers our patrons a luxury hotel product, which had not been available at studio city before with two three bedroom suites and villas.

Lawrence Ho: It is attracting a high-end customer base to the property and driving gaming demand with the help of the new high-limit gaming area that opened in December on the second floor of the Epic Tower. The ADT generated by this customer base is at levels that have not been seen at Studio City previously, and Studio City is reaching record levels of daily mass and slot GGR. 2024 is set to be another exciting year for us. Among the various ongoing events and projects, our Residency Concert Series at Studio City is scheduled to start in March. We have started construction of the Cineplex at Studio City Phase 2, and we aim to bring back our award-winning show, The House of Dance and Water, by the end of the year.

Mister Lollipop: It is attracting a high end customer base to the property and driving gaming demand with the help of the new high limit gaming area that opened in December on the second floor of the ethic tower.

Mister Lollipop: The AVP generated by this customer base are at levels that had not been seen a studio city previously.

Mister Lollipop: Studio City is reaching record levels of daily mass and slot G. G R.

Mister Lollipop: 2024 is set to be another exciting year for us.

Mister Lollipop: <unk> the various ongoing events and projects residency concert series that studio city is scheduled to start in March.

Mister Lollipop: Started construction of the Cineplex at studio city phase too.

Mister Lollipop: And we aim to bring back our award winning show the house of dancing water by the end of the year.

Lawrence Ho: We will also start renovations on the Countdown Hotel to bring a new high-end luxury hotel offering to our premium mass customers. In the Philippines, City of Dreams Manila continues to generate solid earnings with significant market share gains in mass table games and slots. City of Dreams Mediterranean in Cyprus continues to be impacted by the conflict in Israel, and it is uncertain how long this will last.

Mister Lollipop: We will also start renovations on the countdown hotel to bring a new high end luxury hotel offering to our premium customers.

Mister Lollipop: In the Philippines City of Dreams, Manila continues to generate solid earnings with significant market share gains and mass table games and flaws.

Mister Lollipop: City of Dreams Mediterranean in Cyprus continues to be impacted by the conflict in Israel and is it is uncertain. How long. This will last however, we have seen some signs of improving demand so far this year.

Geoffrey Stuart Davis: However, we have seen some signs of improving demand so far this year. So with that, I'll turn the call over to Jeff to go through some of the numbers. Thank you, Lawrence. Our group-wide adjusted property EBITDA for the fourth quarter of 2023 was approximately $303 million. Luck Adjusted Groupwide Property EBITDA for the fourth quarter of 2023 came in at $320 million.

Mister Lollipop: So with that I'll turn the call over to address to go through some of the numbers.

Lawrence or Groupwise adjusted property EBITDA for the fourth quarter of 2023 was approximately $303 million luck adjusted Groupwise property EBITDA for the fourth quarter of 2023 came in at $320 million a favorable wind right had a positive impact on C O T Manila.

Geoffrey Stuart Davis: A favorable win rate had a positive impact on COD Manila of around $3 million, while unfavorable win rates at COD Macau, Studio City, and Cypress had a negative impact of approximately $20 million. Details of these adjustments can be found in the supplementary earnings slides posted on our investor relations website. Macau OPEX is expected to increase to approximately $2.6 million per day in the first quarter of 2024 from approximately $2.5 million per day in the third quarter, in line with guidance. This was primarily due to the full quarter impact of the W. Macau at Studio City, which opened in early September 2023. Turning to our balance, we repaid another $200 million of our revolving credit facilities during the fourth quarter of 2020 and repurchased $100 million of bonds at Studio City via a cash tender.

Lawrence: Of around $3 million, while unfavorable when rates at C. O D. Macau studio city in Cyprus had a negative impact of approximately $20 million.

Lawrence: Details of these adjustments can be found in the supplemental returning slides posted on our Investor Relations website.

Lawrence: Macau Opex increased to approximately $2.6 million per day in the first quarter of 2024 from approximately $2.5 million per day in the third quarter in line with guidance. This was primarily due to the full quarter impact VW Macau at studio City, which opened in early September 2000.

Lawrence: 23.

Lawrence: Turning to our balance sheet, we repaid another $200 million of our revolving credit facilities during the fourth quarter of 2023, and repurchased $100 million of bonds in studio city via cash tender.

Geoffrey Stuart Davis: On a consolidated basis, we reduced debt by a total of $950 million over the course of 2023, and we will continue to focus on debt reduction into 2024. As of December 31, 2023, we had around $1.4 billion of consolidated cash on hand. Melco, excluding its operations at Studio City, the Philippines, and Cyprus, accounted for around $750 million. Of this, approximately $125 million was restricted as collateral required for concession-related guarantees issued to the Macau government.

Lawrence: On a consolidated basis, we reduce that by a total of $950 million over the course of 2023, and we will continue to focus on debt reduction into 2024.

Lawrence: As of December 31, 2023, we had around 1.4 billion consolidated cash on hand <unk>.

Lawrence: Melco, excluding its operations in studio city, the Philippines, and Cyprus accounted for around $750 million.

Lawrence: Of this approximately $125 million was restricted as collateral required for concession related guarantees issue to the Macau government.

Geoffrey Stuart Davis: Another notable movement on our balance sheet in 4Q23 is the impairment of Altera by approximately $200 million. Altera has faced some challenges with the change in the VIP segment, and we continue to work through the repositioning of the property. Altera broke even in 4Q23, and we expect performance to improve in 2024. As we normally do, we'll give you some guidance on non-operating line items for the upcoming first quarter of 2024. Total depreciation and amortization expense is expected to be approximately $135-140 million. Corporate expense is expected to come in at approximately $20 million, and consolidated net interest expense is expected to be approximately $125 to $130 million.

Lawrence: Another notable movement in our balance sheet and four 223 is the impairment about pyrrha by approximately $200 million.

Lawrence: <unk> his face some challenges with the change in the VIP segment, and we continue to work through the repositioning of the property.

Lawrence: Tier of broke even in four Q twenty-three and we expect performance to improve in 2024.

Lawrence: As we normally do we'll give you some guidance on non operating line items for the upcoming first quarter of 2024.

Lawrence: Total depreciation and amortization expense is expected to be approximately 135 to 140 million.

Lawrence: Corporate expenses expected to come in at approximately $20 million.

Lawrence: Consolidated net interest expense is expected to be approximately $125 million to $130 million.

Lawrence: This includes finance liability interest of around $6 million relating to fees and payable.

Operator: This includes finance liability interest of around $6 million relating to fees and payable, Sponsored American Deposit Receipt Rep 3 and Finance Lease Interest of approximately $6 million relating to City of Dreams Manila. That concludes our prepared remarks. Operator, back to you for the Q&A. Thank you. If you wish to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again.

Lawrence: Fees payable in relation to the Macau government gaming concession and the Cyprus gaming license.

Lawrence: And finance lease interests of approximately $6 million relating to city of dreams vanilla.

Speaker Change: That concludes our prepared remarks, operator back to you for the Q&A.

Speaker Change: Thank you if you wish to ask a question you would need to <unk> one on one.

Speaker Change: <unk> on your telephone.

Speaker Change: Wait till name to be about.

Speaker Change: To withdraw your question. Please press star one and one again.

Operator: Please stand by while we compile the Q&A roster, and we will take our first question. Your first question comes from the line of George Choi from City.

Speaker Change: <unk>, while we compile the <unk> staff.

Speaker Change: And we will take our first question. Your first question comes from the lineup George Joy from 58. Please go with.

Shui Lung Choi: Please go ahead, your line is open. Thank you very much for taking my question. Hi, Lawrence. Hi, Jeff. Hi, Evan.

George Joy: Had your line as a pet.

George Joy: Thank you very much for taking my question, Hi, Lawrence hijacking I haven't I have a couple of <unk>.

Shui Lung Choi: I have a couple of questions, if I may. Firstly, the numbers are suggesting that you guys lost market share in 2023. I'm just wondering what you guys plan to do to regain your fair market share. And my second question is on capital allocation. Would you please remind us what your capital allocation priorities are? Is there any chance of a dividend resumption? That's all I have.

George Joy: Questions. If I may firstly, the numbers are suggesting that you guys have lost market share in charge of 23 I was just wondering what you guys are trying to do to regain your fear market share.

George Joy: Second question is on capital allocation would you please remind us what your capital allocation priorities are.

George Joy: Any chance of a dividend it'd be assumption.

Lawrence Ho: Thank you very much. All right. Hi George. It's Lawrence.

Speaker Change: All I have thank you very much.

Speaker Change: Alright, Hi, Georgia Lawrence.

Lawrence Ho: So, you know, I think clearly that we lost share in 2023. And I think that's part of the reason for management change as well. You know, I think, post-COVID, David did a great job for us during COVID in terms of trying to survive. But post-COVID, I guess we've continued to cut too deep to the bone in terms of our operating expenditure and how we conduct our business. And I'm glad that it is Chinese New Year.

Speaker Change: So you know I think clearly.

Lawrence Ho: We have los share in 2023, and I think that's part of the reason for our management change as well.

Lawrence Ho: You know I think.

Lawrence Ho: Post COVID-19.

Lawrence Ho: David did a great job for us during Covid in terms of trying to survive.

Lawrence Ho: Buzz.

Lawrence Ho: Post Covid I guess, we've continued to.

Lawrence Ho: Cut too deep to the bone in terms of operating expenditure and how we conduct our business.

Lawrence Ho: And.

Lawrence Ho: I'm glad that Chinese new year, we've had a very strong Chinese area. So far.

Lawrence Ho: We've had a very strong Chinese New Year so far, and as I said in the prepared remarks, we're substantially above 2019 levels. Our mass GGR was up over 22% from last year.

Lawrence Ho: As I said in the prepared remarks were.

Lawrence Ho: Actually above 2019 levels are mass G. G. R was up over 22% from 2019 Chinese new year. So things are moving in the right direction even without.

Lawrence Ho: So things are moving in the right direction, even without the recent management changes. City of Dreams invented the premium mass segment over 10 years ago and so the goal for us is to really reclaim the crown in the premium mass sector and in order to do that you know I think we need to work together as a team and and with some of the new recent appointments to you know improve the quality of our offering um you know I think frankly post COVID you know looking around um you know we really did you know cut way too much of our offering out there I think that's why we lost some share from that basis um so I think that is being addressed we have done it you know a million times in the past and you know we've enjoyed having the pole position in premium mass for a very long time so I think the goal is to really reclaim that um I guess your second and third questions were more, Well, I think capital allocation, our number one goal this year, I'll let Jeff elaborate. Our number one goal continues to be debt reduction.

The recent management changes so.

Lawrence Ho: The city of dreams invented the premium mass segment.

Lawrence Ho: 10 years ago, and so the goal for us is to really reclaim the crown and the premium sector and in order to do that I think we need to work together as a team and with some of the new recent appointment was to improve the quality of offering.

Lawrence Ho: Frankly post COVID-19 looking around.

Lawrence Ho: Really that.

Way too much of our offering out there I think that's why we lost some share from that basis. So.

Lawrence Ho: So I think that is being addressed we have done it a million times in the past and we've enjoyed having the pole position and premium ask for a very long time. So I think the goal is to really reclaimed up I.

Lawrence Ho: I guess your second and third question that were more.

Lawrence Ho: Well I think capital allocation of our our number one goal this year the outlet shops elaborate.

Lawrence Ho: One number one goal continues to be debt reduction. So I think that's our main focus of course, we have our maintenance capex sense of all of this stuff maybe Justin.

Lawrence Ho: So I think that's, you know, our main focus. Of course, we have our maintenance capex and some of the stuff, maybe Jeff. So clearly, the mandate is debt reduction is the number one priority from a capital allocation standpoint.

So clearly the matinee is debt reduction is a number one priority from a capital allocation standpoint.

Lawrence Ho: At the same time, we are looking for capital-light opportunities to expand the portfolio, but the key laser focus will be on debt reduction. Well, I think in line with that as well, you know, I think, Frankly, nobody has any, other than perhaps Galaxy, that none of the operators really have any major, major CapEx projects in Macau because all the land has been used up.

Lawrence Ho: At the same time, we are looking for capital light opportunities to expand the portfolio.

Lawrence Ho: But yet.

Lawrence Ho: The key laser focus will be on that.

Lawrence Ho: Debt reduction.

Lawrence Ho: Well I think in line with that as well I think.

Lawrence Ho: I think frankly nobody has any other then grabbed galaxy is it.

Lawrence Ho: None of the operator is really have any major a major capex projects in Macau, because all of the land has been used up.

Lawrence Ho: I think for us, you know, as we continue to improve the product offering, we'll look at areas that we can, you know, minor projects that can improve those, but I wouldn't say there are any major CapEx on the horizon. And with regard to our Macau government investment tender commitment, you know, I think out of the six, we've always had, you know, I think it's public knowledge that we have the lowest amount, and I'm pleased to say that we were the only one last year that fulfilled our full amount. And so I think going forward, even with the additional 20% addition, we're comfortably below everybody else. That's very good, Carlos. Thank you very much.

Think for US as we continue to improve the product offering we will look at areas that we can.

Lawrence Ho: Minor projects that can improve those but I wouldn't say there was any measure capex on the horizon and with regards to our Macau government investment tender.

Commitment I think out of the six we've always had I think it's public knowledge that we had the lowest amount and I'm pleased to say that we were the only one last year that fulfilled R.

Lawrence Ho: <unk> full amount and so I think going forward, even with the additional 20%.

Lawrence Ho: Addition, whoo Whoo whoo.

Lawrence Ho: Comfortably below everybody else.

Speaker Change: That's very good thank you very much.

Operator: Thank you. We will take our next question. Your next question comes from the line of Ricardo Chisiela from Deutsche Bank. Please go ahead; your line is open.

Speaker Change: Thank you.

We will take our next question.

Speaker Change: Your next question comes from the lineup Ricardo <unk> from <unk>. Please go ahead, you're lying his iPad.

Ricardo Chisiela: Hey guys, thank you so much for taking my question. I was hoping you could comment on your OPEX expectations going forward, given that from your recent comments, you guys are probably going to enhance some of the services for your guests. So how should we be thinking about OPEX for the balance of the year? Hi, it's Jeff.

Ricardo: Hey, guys. Thank you so much for taking my question I was hoping you could comment on your I'll pay for expectations swimming forward, giving died.

From your Visa Commons you guys are probably going to enhance you know some of the services for your cats. So how would how would should we be thinking about you know opec's for the balance of the year.

Geoffrey Stuart Davis: I'll take the question. And thank you for the question. So, as you know, for the fourth quarter, we came in at 2.6 million per day.

Speaker Change: Hi, Jeff I'll I'll I'll take the question and thank you for the questions. So as you know for for the fourth quarter, we came in at $2.6 million per day.

Geoffrey Stuart Davis: And, you know, going forward, we've highlighted that with the opening of the House of Dance and Water, by the end of the year, that's likely to increase our daily OPEX by about 100,000 a day. In relation to some of the measures that Lawrence mentioned about some customer-centric enhancements that we're considering, I think over the course of 2024, but not immediately, we have somewhere in the neighborhood of another 100,000 per day of enhancements. I got it.

Speaker Change: And.

Speaker Change: Going forward, we had highlighted that with the opening of the asked house of dancing water by the end of the year.

Speaker Change: Lead to increase our daily Opex by about 100000 a day.

Speaker Change: In relation to some of the.

Speaker Change: The measures that Lauren's mentioned about.

Speaker Change: B some customer centric enhanced.

Speaker Change: Enhancements that we're considering I think over the course of 2024, but not immediately.

Speaker Change: We have somewhere in the neighborhood of another 100000 per day of and asked us.

Ricardo Chisiela: Perfect. If I may follow up with an additional question, I know that you guys classify your premium mass customers into several tiers and that, you know, you highlighted some encouraging data regarding recent performance in the Golden Week. Is there a tier within your premium match that is doing slightly better or ahead than the rest of them? Are they, you know, back to pre-pandemic levels, perhaps a little bit higher? How should we think about the different tiers that make up your premium match business? Hey Ricardo.

Speaker Change: Got it perfect if <unk> meaningful up with an additional question I know that you guys. You know classify you opinion, most customers seem thrilled tears.

Speaker Change: And that you know you.

Speaker Change: Highlighted some encouraging data regarding you know reaching performance in the Golding week is there at here within European Mad that he's doing like the better had that the progressive once a day you know back to prepaid that'd be levels, perhaps a little bit higher how should we think about you know the difference you know tears.

Speaker Change: Make up your P much business.

Speaker Change: Hey, Ricardo so I think it would be.

Lawrence Ho: So I think, you know, the recovery has been pretty broad-based when you refer to premium mass, you know, of course, you know, infrastructure, you know, although visitation from China is rising, you know, infrastructure isn't totally back yet. So I think, if anything, that's affecting more of the general mass or grime mass. But with regard to premium mass, it's pretty across the board in terms of the various sectors that we have. So I wouldn't say there is one or two sectors that are, you know, over-indexed or under-indexed. Got it. Thank you. Thank you. We will take our next question. Your next question comes from the line of John DeCree from CBRE. Please go ahead; your line is open. Hi everyone.

Ricardo: The recovery has been pretty broad base when you refer to premium mass of course infrastructure.

Ricardo: Though visitation from.

Ricardo: China is rising infrastructure and totally back yet so I think if anything that's affecting more of the.

Ricardo: General math or Brian masks, but with regards to a premium mass it's pretty across the board in terms of the various sectors that we have so I wouldn't say there is one or two sector where that is.

Ricardo: Over over index signal under indirectly.

Speaker Change: Got it thank you.

Speaker Change: Thank you.

Speaker Change: We would take our next question.

Speaker Change: Your next question comes from the line of John Decree from C. B R. A please go ahead your line is open.

John G. DeCree: [noise] hi, everyone. Thank you for taking my questions, maybe just to start with a housekeeping item for Jeff I didn't if.

John G. DeCree: Thank you for taking my questions. Maybe just to start with a housekeeping item for Jeff. If I missed it, I apologize. Did you give, or could you give, CapEx expectations for 2024? Sure, you didn't miss it for 2024.

John G. DeCree: If I missed it I apologize did you gave her could you give capex expectations for 2024.

John G. DeCree: Sure.

Geoffrey Stuart Davis: You didn't miss it for 2024, we're looking at Capex of approximately 360 $375 million.

Geoffrey Stuart Davis: We're looking at capex of approximately 360 to 375. Great. Thanks, Jeff. And then maybe to revisit an earlier question a little bit, some of the comments you had made around pursuing some asset-light opportunities to expand the portfolio. Curious if you could elaborate a little bit on that.

Speaker Change: Great. Thanks, Jafar, then maybe maybe revisit will earlier question a little bit some of the the comedy had made around.

Pursuing some asset light opportunities to expand the portfolio curious if you can elaborate a little bit on that and I guess, you know, we kind of thinking in the context of.

Lawrence Ho: And I guess, you know, we kind of think in the context of some larger markets that some of your peers and global casino operators are looking at, particularly the UAE, which is very topical right now. So curious if there's other markets or anything you can kind of elaborate on things that you're looking at externally. Well, I think it's a bit early as well.

Speaker Change: Some larger markets. It's some of your peers and global casino operators are looking at.

Speaker Change: Particularly the UAE is is very topical right now so curious if there's other markets or anything you can kind of elaborate on things that you're looking at externally.

Speaker Change: Well I think it's a bit early as well so I think given.

Lawrence Ho: So, you know, I think given our, you know, we're still climbing out of COVID holes. I think we're looking at some smaller potential projects, but nothing, I think that's, you know, ready to be announced. But in terms of the longer term, bigger projects like UAE or the Thailands, you know, I think we're kicking the tires like everybody else. But as we learned from the Japanese process, these things usually take a, you know, it's a multi-year process. That's fair.

Speaker Change: We're still climbing out of Covid hole.

Speaker Change: I think we're looking at some like smaller potential projects, but nothing I think thats ready to be announced.

Speaker Change: But in terms of the longer term bigger projects like UAE or the Thailand.

Speaker Change: I think we're kicking the tires like everybody else.

Speaker Change: But as we learn from the Japan process. These things usually take a.

Speaker Change: It's a multi year process.

John G. DeCree: Okay. Thank you, Lawrence. Thanks, Jeff.

Speaker Change: That's fine okay. Thank you Lord Thanks Jess.

Speaker Change: Mmm.

Operator: Thank you. We will take our next question. Your next question comes from the line of Carl Choi from Bank of America. Please go ahead, your line is open. Hi, thank you. Two questions.

Speaker Change: Thinking.

Speaker Change: We would take our next question.

College choice: Your next question comes from the line of College choice.

College choice: Now can I. Please go ahead, you're lying as a pet.

College choice: Hi, Thank you two questions first coming back to the question. The new appointment that you mentioned could you elaborate a little bit on apart from obviously G job market share what are some of the key sort of metrics so they'll kpis at the.

Shui Lung Choi: First, coming back to the question of the new appointments that you mentioned, could you elaborate a little bit on, apart from obviously GGL market share, what are some of the key sort of metrics, sort of KPIs that you're trying, you're hoping that the new operations people that you're bringing in can achieve this year? And second, can you just talk a bit about the competitive environment? I think on the last call, it was mentioned that the reinvestment rate was a little bit elevated, perhaps in relation to the fact that premium mass has recovered a little bit faster. So what's the latest in terms of the reinvestment rate? And also, just curious; some of your folks, some of your peers are ruling out RFID tables.

College choice: You tried you hoping that the new operations people that your upbringing and can achieve this year and second can you just talk a bit about the competitive environment I think on the last call. I was mentioned that reimbursement rate was a little bit elevated perhaps in relation to the fact that premium gas has recovered.

College choice: <unk> so what's the latest in terms of reimbursement rate and also just curious some of your folks yeah. <unk> tables, you send you plan to do so over at <unk>.

Lawrence Ho: Is there any plan to do so over at Andrew Portfolio as well? Thanks. Hey, Carl, um, you know, I think maybe I'll take it, and Evan wants to add some color.

Speaker Change: <unk> you as well thanks.

Speaker Change: A call you know I think maybe I'll I'll take it and everyone wants to add some color.

Speaker Change: Are.

Lawrence Ho: Our RFID tables are coming next month, so we're quite excited to have them. But again, it's going to be a rolling process. I think we're getting them for the first time. There's going to be a learning curve.

Speaker Change: A R. R. R F cables that coming next month. So we're quite excited to have them, but again and it's gonna be a rolling process I think we're getting them for the first time, there's going to be a learning curve.

Lawrence Ho: But I think we're excited to see and make use of the full potential of these RFID tables. I think, you know, in terms of reinvestment, the market is very competitive. I think if you look at our competitors' results as well, you can see it. So I think for us, as part of the new plan is, you know, how do we, you know, Melco was always the innovator in terms of product offerings and service level and being guest-centric. So it's about how we spend the reinvestment wisely rather than, you know, just purely giving things away.

Speaker Change: But I think we're excited to see to make use of the full potential of these RFID tables.

Speaker Change:

Speaker Change: And I think you know in terms of reinvestment.

Speaker Change:

Speaker Change: That the market is very competitive I think if you look at our competitors of results as well and I think you can see it.

Speaker Change: So I think for us as part of the New plan is.

Speaker Change: How do we Melco was always the innovator in terms of product offerings in the service level and being guests centric. So it's about how do we.

Speaker Change: Spend the reinvestment wisely.

Rather than just purely giving things away.

Lawrence Ho: So, yeah, I think that's, you know, we are re-establishing our strategic analytics and strategic marketing unit. You know, we're adding in retail, we're adding in hotel, and food and beverage. These are all guest-centric, guest-facing experiences that we really care about.

Speaker Change: So yeah I think that's I think if you look at the appointments that we have we are re establishing a strategic.

Speaker Change: Analytics and strategic marketing unit.

Speaker Change: We're adding in retail we're adding in hotel food and beverage. These are all guests centric.

Speaker Change: Guests facing experiences that we really care about.

Evan Winkler: So I think that will, you know, it's been a great solution for us in the past. I think we'll continue to work in the future. I don't know if Evan want to... Sure, to continue on with Lawrence's articulated... We brought in three senior hires. All of that is really focused on how we're looking at our gaming operations and how do we really get greater efficiency in terms of our spend there Where we're allocating our resource how we're driving the floor floor layouts, and so we're looking at that to Again, not just improve our TGR, but also improve some of our efficiency and allocations here as we look at player reinvestment, etc, On the retail front, obviously, we have a luxury player at COD and a luxury retail footprint.

So I think that will.

Speaker Change: It's been great.

Great solution for us in the past or they will continue to work in the future I dunno even want to.

Speaker Change: [noise] sure to continue on with Lawrence articulated.

Speaker Change: We brought in three senior hires.

Speaker Change: All of that is really focused on how we're looking at our gaming operations and how do we really get.

Speaker Change: Greater efficiency in terms of our spend their we're we're allocating our resource how we're driving the floor floor layouts and so we're looking at that too again, not just improve our <unk>, but also improved some of our efficiency and allocations here.

Speaker Change: As we look at player reinvestment et cetera.

On the retail front, obviously, we have a luxury player at C O D and a luxury retail footprint.

Speaker Change: It's an area that has a focus of improvement we feel that bringing in someone who's got deep.

Evan Winkler: It's an area that is a focus of improvement. We feel that bringing in someone who's got deep Shs Sponsored American Deposit Receipt Repr 3, In terms of picking up on some of the OPEX, we'll likely get someone similar at some point here in the future at SC as we look to enhance our bench strength in those areas. In addition, as Lawrence articulated, we've reoriented our sales force under a central point so that we have more centralized focus around the customer experience and customer journey. And we're also doing that in our premium areas as well. And so, from top to bottom, the view here is that we've reoriented again to being customer-centric in our approach and making sure that we are leading and innovating across the premium category. The belief is that it's going to help us regain market share, but obviously, along the way, we want to make sure that we're doing it in a way that is efficient in terms of power while allocating resources to those efforts. Oh, great. The cuddle is very helpful.

Speaker Change: Long term relationships with these key luxury brands who's going to help us enhanced that offering.

Speaker Change: Probably is not today tomorrow thing, but as we continue to evolve the retail experience both <unk> and then we brought in a V.

Speaker Change: Hotel out and be at C. O D to just make sure that from a guest in customer experience that we are leading the market once again across all fronts.

Speaker Change: In terms of picking up on some of the opex likely to get somewhat similar at some point here in the future at S. C. As we look too.

Speaker Change: Enhance our bench strength in those areas.

Speaker Change: In addition, as Lawrence articulated we've reoriented are salesforce under a central point, so that we have.

Speaker Change: More centralized focus around the customer experience in customer journey.

Speaker Change: And we're also doing that at our premium areas as well.

Speaker Change: So I think from top to bottom. The view here is is that we've reoriented again back to being customer centric in our approach and.

Speaker Change: And making sure that we are leading and innovating across the premium category.

Speaker Change: The belief is that's going to help us regain the market share, but obviously along the way we want to make sure that we're doing it.

In a way that is efficient in terms of how we're we're allocating the resources to those efforts.

Speaker Change: Gregg Cutler was very helpful. Thanks.

Shui Lung Choi: Thanks. Sponsored American Deposit Receipt Repr 3, Thank you. We will take our next question. Your next question comes from the line of Joe Graff from J.P. Morgan. Please go ahead, your line is open. Hi Lawrence, hi Jeff, hi Evan.

Thank you we will take our next question.

Speaker Change: Your next question comes from the line of <unk> from J P. Morgan. Please go ahead, you're lying his iPad.

J: Hi, Lawrence Hey, Jeff.

Joseph Richard Greff: You obviously talked, as others have, about a strong Chinese New Year, which is encouraging. Can you talk about, and maybe you didn't, I missed it, but I don't think you did, can you talk about your views on how you performed in January in relation to the market and as well as in the balance of February outside of... Shs Sponsored American Deposit Receipt Repr 3, Hey, Joe, you know, I think the results do, you know, fluctuate month to month. And, you know, I think clearly the reason that we wanted to make a management change at this time was that, you know, we felt that we were losing share, and, you know, more important to us is not so much the top line market share, which has never really been the case that we cared about.

J P: You, obviously taught others have about a strong Chinese new years.

Speaker Change: Which is encouraging can you talk about and maybe you did and I missed it I don't think he did it can you talk about.

Lawrence Ho: Your views on how you performed in January in relation to the market and as well is in the balance in the balance of February outside of the Chinese do you wish you could maybe talk about.

Lawrence Ho: G G R. As a percentage of 2019 or EBITDA per day or or some performance metric outside of what's been and deadliest strong Chinese new year period.

Speaker Change: Hey, Joe.

Speaker Change: Think are you know the the.

Speaker Change: The results do fluctuate month to month and I think clearly the reason that we wanted to make a management change at this time was that.

We felt we.

Speaker Change: We were losing share and more important to us is not so much the top line market share that has never really been the case that we cared about it was really about EBITDA.

Joseph Richard Greff: It was really about EBITDA. But, you know, I think month to month, it does fluctuate. You know, even premium direct VIP, you know, with the win rate, seriously affects that. But I think more importantly, and something actually I was surprised that nobody has really been too focused on was the addition of the two new Chinese cities that will start accepting visitors on March 3rd. You know, both Xi'an and Qingdao are two massive cities with over 10 million people and with high disposable income.

Speaker Change: But yeah, I think month to month.

Speaker Change: It does fluctuate even.

Speaker Change: Even premium direct VIP.

Speaker Change: With the wind right.

Speaker Change: Seriously effects that but I think more importantly than something actually I was surprised that nobody is really.

Speaker Change: Been too focused on was the additional after two new Chinese cities that will start accepting visitors on March 3rd.

Speaker Change: <unk> two massive cities with over 10 million people and with high disposable income so I'm actually really excited about that and I think with our.

Lawrence Ho: So I'm actually really excited about that. And I think with our, you know, guest-centric, you know, and the restructuring that we're doing, I think we should be able to capture a lot of that going forward with the growth. And also, don't forget, there haven't been any new individual traveler IBS cities in the last 15, 20 years.

Speaker Change: Guess centric.

Speaker Change:

Speaker Change: And the restructuring that we're doing.

Speaker Change: I think we should be.

Speaker Change: Be able to capture a lot of that going forward with the growth and also don't forget there hasn't been any new individuals traveller.

Speaker Change: Ibs hit cities in the last 15 20 years. So if anything this is a very strong sign of things to come.

Lawrence Ho: So, if anything, this is a very strong sign of things to come. Great. That's helpful, Lawrence. And then the search that's underway right now to replace David, when do you think your search will be complete, and you'll have somebody, whether that's an external, I'm presuming it's an external person, but when could that person be on board? Well, you know, I think for us that, you know, the new additions and the restructuring are probably going to keep us busy for the next couple of months. You know, I think both Evan and I are going to be much more actively involved during that time. I think it's important that we want to find the right candidate. Going forward, you know, we had a great eight years with David. But I think, you know, the next candidate, I think really needs to, you know, follow the DNA of Melco and what made us great all the years before, which was, you know, focused on luxury and, you know, amazing, extraordinary guest experiences.

Speaker Change: Great that's helpful. Lawrence and then.

Speaker Change: The search that that's underway right now to replace David.

Speaker Change: When do you think you'll search will be complete and you'll have somebody.

Speaker Change: Whether that to an external I'm presuming, it's an external person, but when that person can be on board.

Well, you know I think for us.

Speaker Change: The with the new additions in the restructuring that's probably going to keep us busy for the next couple of months.

Speaker Change: I think both urban and I are.

Speaker Change: Going to be much more actively involved during that time I think it's important that we wanted to find the right candidate.

Speaker Change: Going forward, we had a great eight year run with David.

Speaker Change: But I think the next candidate I think really needs to.

Speaker Change: Followed the DNA of Malka and when we were what made US great. All the years before which was focus on luxury.

Speaker Change: Amazing extraordinary guests experiences.

Lawrence Ho: Great, thank you. Thank you. There are no further questions.

Speaker Change: Great. Thank you.

Speaker Change: Thank you to have on a set of questions I would like to <unk> for closing remarks.

Jeanny Kim: I would like to hand back to Jeanny Kim for closing remarks. Thank you, operator, and thank you for participating in our call today. We look forward to speaking with you again next quarter. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: Thank you upgraded and thank you for participating in our call today, we look forward to speaking with you again next quarter.

Speaker Change: Thank you.

Speaker Change: This concludes today's conference call.

Speaker Change: Peyton you may now disconnect.

Speaker Change: [music].