Moody’s Forecasts Higher Revenue And EBITDA For Melco Resorts

Melco Resorts & Entertainment Ltd is projected by Moody’s Ratings to achieve a 4.5% year-over-year gain in its revenues for 2026, bringing them to US$5.4 billion. For 2027, Moody’s anticipates that the company will see additional gains, with its revenues estimated to grow 4% to US$5.6 billion.

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The estimates came in a credit opinion released on Melco Resorts Finance Ltd, which is a wholly owned subsidiary of Melco Resorts. According to Moody’s, consolidated revenues of the group were US$5.2 billion for the 12-months ended June 30 of this year.

Macau Market Supports Forecast

Moody’s sees Macau’s industry-level gross gaming revenue rising by 6% in 2026 and then growing by 4% to 5% in 2027, citing continued growth in tourists from mainland China.

For Melco Resorts, its market share in Macau’s gaming industry is expected to be around 15%. According to Moody’s, massive entertainment activities such as residency acts, concerts, and sports events will continue to attract tourists and their spending.

New hotel offerings are also expected to contribute to growth. The report identified the REM Hotel at Melco Resorts’ City of Dreams property in Macau as one of the additions supporting the outlook. The hotel is progressively opening.

EBITDA Expected To Increase

According to Moody’s, Melco Resorts’ adjusted EBITDA is estimated at about US$1.3 billion in 2026 against US$1.25 billion in 2025. Further increase in EBITDA is estimated at US$1.4 billion in 2027.

The group’s adjusted EBITDA margin is projected to improve somewhat to an estimated 24% to 25%. As noted by Moody’s, the improved EBITDA margin will be partially driven by the efficiency programs.

Melco Resorts recorded adjusted EBITDA of US$612 million in the 1H of 2026, down 2.5% from the prior-year period. Its adjusted EBITDA margin fell to 23.4% from 24.5% a year earlier.

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Moody’s said the 1H decline reflected weaker rolling-chip and mass-market table performance, lower non-gaming operations, and higher marketing costs in the 2Q.

Leverage Expected To Decline

The anticipated improved profit performance, along with the ongoing reduction in debt, will see the debt to EBITDA ratio fall to approximately 5.5 times by 2026. This was compared to 5.9 times in the last 12 months ending June 30.

This ratio is further projected to fall to around 5.0 times in 2027. Moody’s said the projected leverage supported Melco Resorts Finance’s Ba3 corporate family rating.

Moody’s forecasts adjusted debt of US$7.2 billion at the end of 2026, before it falls to US$6.9 billion at the end of 2027. Adjusted debt stood at approximately US$7.3 billion at the end of June.

Debt Reduction Remains Priority

The ratings agency said Melco Resorts had been prioritizing debt reduction. Adjusted debt has fallen from a peak of US$8.7 billion at the end of 2022.

Moody’s forecasts assume that Melco Resorts will resume dividend payments in early 2027. The agency also expects the company to complete the full US$590 million of authorized share repurchases between 2026 and 2028.

Melco Resorts operates casinos in Macau, Manila, and the Republic of Cyprus, and launched a casino in Colombo during the 3Q of last year. The expectations of the corporation regarding revenues and EBITDA depend on the growth of Macau’s market, its performance, and efforts concerning debt reduction and distribution of dividends. The projections are made for revenue, EBITDA, leverage, debt, dividends, and share buybacks up until the end of 2028.

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Source: GGR Asia