Studio City expects break-even despite Covid crisis

The operator has reported a GGR increase during October and November 2020 which should see it break even based on adjusted EBITDA.

Macau.- Studio City International Holdings Limited, the company that is developing an expansion of a casino complex in Cotai, has shown confidence to the markets amid the pandemic after posting its latest financial report.

According to Studio City Finance Limited, its wholly-owned subsidiary, it expects to achieve break-even adjusted EBITDA upon reaching about 30 per cent to 35 per cent of its historical gross gaming revenue run-rate.

The forecast comes after Studio City’s casino’s combined gross gaming revenues during October and November 2020 resulted in an increase by approximately 146 per cent compared to the previous quarter.

This grow is directly related to the city’s gradual recovery from the Covid-19 pandemic, especially in the gaming and tourism sector.

Studio City Finance has reported to the United States Securities and Exchange Commission that by 30 November 2020 the company held cash equivalents of US$98.6m, plus HK$233m under a revolving 2016 credit facility, all of which was available for drawdown.

However, it added, it also held US$1.60bn in outstanding indebtedness, consisting primarily of the 2019 notes with a principal amount of US$600m due February 2024, plus US$500m in 6.0 per cent notes due July 2025 and US$500m in 6.5 per cent due January 2028.

The completion of Phase 2 of Studio City’s expansion, however, has been postponed last year due to the impact of the pandemic. It was expected for May 31, 2022, but the deadline could be changed.

Phase 2 will offer approximately 900 additional luxury hotel rooms and suites, one of the world’s largest indoor/outdoor water parks, a Cineplex, fine-dining restaurants and MICE space.