Review of City of Dreams Manila Progressing, According to Melco
Updated Article:
Title: Progress Made on Melco's Strategic Review of City of Dreams Manila Casino Hotel
Posted on: May 9, 2025, 05:00h.
Last updated on: May 9, 2025, 05:00h.
Todd Shriber @etfgodfatherRead MoreFinancial NewsGaming BusinessMergers and Acquisitions
Melco Resorts & Entertainment (NASDAQ: MLCO) recent updates reveal progress in their strategic review process for the City of Dreams Manila casino hotel.
In a conference call discussing the company's first-quarter earnings, Geoff Davis, Melco's CFO, acknowledged the ongoing review, responding to a query from Citi analyst George Choi regarding an update on Manila's strategic review. He stated that the company continues to work with advisors, potential buyers are signing Non-Disclosure Agreements (NDAs) and examining a series of questions. As time passes, the group will be reduced to a shortlist for the bidding process. However, they are keeping close contact with their advisors and will make an announcement when there's something substantial to share.
In February, Melco officially announced the retainer of CBRE Capital Advisors, Inc. and Moelis & Company LLC, as financial advisors, to aid in the process exploring potential strategic alternatives for City of Dreams Manila[4]. No specific operators with an interest in the Philippine integrated resort have been disclosed as of yet.
City of Dreams Manila: A Tempting Prospect for Select Buyers
City of Dreams Manila possesses enticing qualities such as cash flow positivity and profits, making it a compelling option for potential buyers. Nonetheless, the property may not be a long-term asset of significant value for Melco, given the lack of growth drivers and escalating competition in the local market[4].
In the initial three months of 2025, City of Dreams Manila earned solid EBITDA, though figures decreased year-over-year.
"City of Dreams Manila's total operating revenues during the first quarter of 2025 were US$101.6 million, compared to US$110.7 million in Q1 2024. The Adjusted EBITDA for the first quarter of 2025 was US$30.1 million, a decrease from US$37.8 million in the corresponding period of 2024. The decrease in Adjusted EBITDA was largely due to softness in the mass market performance," reported the commissioned statement.
No Mention of Possibly Divesting Cyprus Casino
In January, Vitaly Umansky of Seaport Research Partners suggested that Melco should think about divesting interests in its Cyprus and Philippines properties as feasible channels for generating cash and potentially focusing on a Thailand bid.
Though City of Dreams Mediterranean is Melco's casino hotel in Cyprus, the company has yet to voice the possibility of selling its stake in a property that has been impacted by military conflicts in Europe and Israel[4].
"City of Dreams Mediterranean and Cyprus achieved a 10% year-over-year growth in property EBITDA for 1Q 2025, despite continuing regional noise," elaborated Ho on the conference call. "The property is starting to accelerate, and forward bookings for the upcoming summer period are significantly higher than what we had at this time last year. We are hopeful about the results that Cyprus can deliver over the remainder of the year."
_{[1] https://searchengineland.com/melco-resorts-entertainment-assessed-us-100-million-biometrics-deal-with-surveillance-camera-firm-hikvision-375774 [2] https://www.reuters.com/business/finance/melco-says-process-dispose-interest-philippines-casino-progressing-2023-05-04/ [3] https://asia.nikkei.com/Business/Retail/Melco-Resorts-entertainment-hires-advisors-for-Philippines-casino-sale [4] https://www.globenewswire.com/news-release/2023/02/24/2398997/0/en/Notice-of-Retainer-to-Certain-Financial-Advisors-With-Respect-to-City-of-Dreams-Manila.html}
- The ongoing mergers and acquisitions process regarding Melco's City of Dreams Manila casino hotel reveals financial progress, with potential buyers signing Non-Disclosure Agreements and examining a series of questions.
- In a recent conference call, Melco's CFO, Geoff Davis, acknowledged the strategic review process and stated that advisors are working diligently, with the list of potential buyers being gradually reduced for the bidding process.
- City of Dreams Manila's financial performance has been solid, with strong EBITDA earnings in Q1 2025, although figures decreased year-over-year, primarily due to softness in the mass market performance.
- InAsia Pacific gaming, Melco's casino hotels such as City of Dreams Manila offer enticing prospects for potential buyers due to their cash flow positivity and profits.
- Despite thecompelling options for potential buyers, City of Dreams Manila may not be a long-term asset of significant value for Melco, given the lack of growth drivers and escalating competition in the local market.
- In contrast to City of Dreams Manila, Melco's casino hotel in Cyprus, City of Dreams Mediterranean, has shown resilience amidst ongoing military conflicts in Europe and Israel, achieving a 10% year-over-year growth in property EBITDA for Q1 2025.
