Moody’s sees Melco Resorts revenue rising 4.5pct in 2026, EBITDA at US$1.3bln

Moody’s Ratings expects casino operator Melco Resorts & Entertainment Ltd to post a 4.5-percent year-on-year increase in revenue for 2026, to US$5.4 billion, followed by further growth next year. Such improvement will be supported by expansion in Macau’s gaming market and a stable market share for the firm, the ratings agency stated in a Wednesday memo. The institution forecasts Melco Resorts’ revenue will rise by another 4 percent in 2027, to US$5.6 billion. The projections were included in a Moody’s credit opinion on Melco Resorts Finance Ltd, a wholly-owned subsidiary of Melco Resorts. The ratings agency said the latter’s consolidated revenue was US$5.2 billion in the 12 months to June 30 this year. Moody’s expects Macau’s industry-wide gross gaming revenue (GGR) to increase by 6 percent in 2026, followed by growth of between 4 percent and 5 percent in 2027. Those assumptions are “underpinned by continued growth in the number of visitors from mainland China,” the institution noted. Moody’s said it expected Melco Resorts to maintain a “solid” share of the Macau gaming market, at about 15 percent. “Large-scale entertainment offerings – including residency shows, concerts and major sporting events – will continue to support visitation and spending,” the ratings agency said. The report added that new hotel offerings would also be a growth driver, including the REM Hotel at Melco Resorts’ City of Dreams property in Macau, which is already progressively opening. Moody’s expects Melco Resorts’ adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) to reach about US$1.3 billion in 2026, up from US$1.25 billion last year, and to increase further to US$1.4 billion next year. The ratings agency forecast the group’s adjusted EBITDA margin would improve modestly, to about 24 percent to 25 percent, helped by “operational efficiency initiatives”. Melco Resorts recorded adjusted EBITDA of US$612 million in the first half of 2026, down 2.5 percent from the prior-year period. Its adjusted EBITDA margin declined to 23.4 percent, from 24.5 percent a year earlier. Moody’s said the first-half EBITDA decline reflected “softer rolling chip and mass-market table performance, a decline in non-gaming operations and higher marketing costs” in the second quarter. The expected earnings improvement, combined with gradual debt reduction, should help Melco Resorts’ adjusted debt-to-EBITDA ratio decline to about 5.5 times in 2026, from 5.9 times for the 12 months to June 30, and to about 5.0 times in 2027, according to Moody’s. The ratings agency said the projected leverage supported Melco Resorts Finance’s ‘Ba3’ corporate family rating. Melco Resorts runs casinos in Macau, one in the Philippine capital Manila, and several in the Republic of Cyprus. In the third quarter last year, it launched a new casino in the Sri Lankan capital, Colombo. Moody’s forecasts Melco Resorts’ adjusted debt at US$7.2 billion by the end of this year, before declining to US$6.9 billion at end-2027. Adjusted debt stood at approximately US$7.3 billion at the end of June. The ratings agency also said Melco Resorts had been prioritising debt reduction, with adjusted debt having fallen from a “peak of US$8.7 billion as of year-end 2022”. Moody’s forecasts assume Melco Resorts will resume dividend payments in early 2027 and execute the full US$590 million of authorised share repurchases over the 2026 to 2028 period.