Melco Resorts & Entertainment Limited

Ladies and gentlemen, thank you for standing by. Thank you for participating in the first quarter 2020 earnings conference call of Melco Resorts & Entertainment Limited. 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 Mr. Richard Huang. Director of Investor Relations of Medical Resorts & Entertainment Limited. Please go ahead, Sam.

First of all, let me apologize for starting a little bit late. We're having a little bit of technical difficulty, but thank you very much for joining us today for First Quarter 2020 Earnings Call. On the call today are Lawrence Ho, Geoff Davis, Evan Winkler, and our property presidents in Macau and Manila. Before we get started, please note that today's discussion may contain forward-looking statements made under the safe harbor provision of federal securities law. Our actual results could differ from our anticipated results. I'll now turn the call over to Lawrence.

Thank you, Richard. I hope all of you and your loved ones are safe and sound during these challenging times. I would also like to express my sincere gratitude to the PRC and the Macau SAR government for their proactive response to contain the spread of the virus. I would especially like to thank the Chief Executive of Macau for his decisive leadership, which is exactly what we need in these unprecedented and difficult times. As you may recall, in February, we were the first integrated resort operator to call out the severity of the COVID-19 outbreak and to encourage investors not to expect a V-shaped recovery in Macau. In recognizing this risk earlier than most, We were able to take a number of proactive actions that better prepared the company for the challenging environment we face today. In February, we canceled the purchase of the second tranche of Crown Resorts shares. And in April, we sold our 9.99% stake in Crown, which further strengthened our balance sheet with the approximately $355 million of sales proceeds. Additionally, immediately following the COVID-19 outbreak, We undertook a detailed look at our Macau cost base and have meaningfully reduced our daily fixed OPEX run rate. To complement our cost containment efforts, I am personally forgoing my salary for the remainder of the year. Furthermore, the Melco Senior Executive Management Team has volunteered for a pay cut equivalent to 33% of their base salary. and our Board of Directors have volunteered for a cash reduction of their fees. To leave no stone unturned, we have taken the opportunity to closely review our management structure to drive further efficiencies. A few of our management staff have unfortunately departed, but this will allow Melco to emerge as a leaner, more efficient company when demand returns. In these difficult times, I believe it is important for us to offer reassurance and reiterate our long-term commitment to our colleagues, to our shareholders, and to the communities we serve. First and foremost, MELCO's success is dependent on our colleagues. While cost control is important, this will not come at the expense of the long-term development of our colleagues in whom we continue to invest in career and whole person development programs. We remain committed to maximizing customer loyalty and experience by leveraging our portfolio of the world's most star-studded integrated resorts, which won a record-breaking total of 107 stars in the 2020 Forbes Travel Guide. To enhance the guest experience, we will continue to invest in our properties with the renovation of Nuwa and additional villas at Morpheus. In the first quarter, Our premium-focused integrated resorts took significant market share in the VIP and mass gaming segments. Our Macau EBITDA performance has also meaningfully outperformed that of our peers, despite the company conservatively increasing its bad debt provision in the first quarter. Third, we remain fully committed to supporting the communities we serve. In China, We donated HK$20 million to the Hubei Red Cross, HK$5 million to the Macau Federation of Trade Unions, and HK$3 million to the Women's General Association of Macau. We hired 100 local resident construction workers and donated 500,000 surgical masks to the Macau government and the local community. We have mobilized thousands of our colleagues to support the local community through our simple acts of kindness program and volunteering events. To support local SMEs through local production and manufacturing opportunities, we are also launching a mass design competition in collaboration with the Macau Productivity and Technology Transfer Center. to cultivate creativity and to create reusable and sustainable face masks. In the Philippines, we donated over 150 million pesos worth of food packs and service installations for the government's relief efforts, which include 420,000 bottles of water, 625 kilograms of rice, 15,000 N95 face masks. In Cyprus, we donated €100,000 to the Ministry of Health to further the Cyprus government's efforts to curb the spread of COVID-19 while supporting the Cyprus community during these challenging times. Fourth, this crisis is reinforcing our desire to lead the way in sustainability and to change some of the fundamentals of our industry. Melco remains dedicated to being sustainable. Our focus and efforts around environmental sustainability have also been recognized by the global non-profit environmental organization CDP as the 2019 Best First-Time Performer. Fifth, MELCO remains committed to its global development program. Our next major project in Macau will be Studio City Phase 2. Upon completion, The Phase 2 expansion will increase Studio City's hotel room inventory by approximately 60%, with two new hotel towers offering a total of approximately 900 luxury hotel rooms and suites. In addition to an expansion of gaming space, Phase 2 will also offer new non-gaming attractions that are highly complementary to those in Phase 1, including a cineplex, one of the world's largest indoor-outdoor water parks, fine dining restaurants, and state-of-the-art Myspace. In Cyprus, we are developing the City of Dreams Mediterranean. Construction restarted on May 6. Upon completion, COD Mediterranean will be Europe's largest integrated resort, offering over 100 gaming tables, 1,000 slot machines and 500 hotel rooms. We continue to work diligently in Japan. After submitting our response to the Yokohama RFC in December of last year, we continue to actively engage with Yokohama officials to discuss our plans of bringing to Yokohama the best IR the world has ever seen. Finally, we remain fully committed to shareholder returns. Year-to-date, the company has repurchased approximately 3 million ADSs, worth approximately $45 million. However, in an effort to preserve liquidity in light of the COVID-19 pandemic and to continue investing in our business, the Board has decided to suspend the company's quarterly dividend program. This is a prudent course of action given current market conditions. Melco remains committed to returning capital to shareholders with a regular quarterly dividend and will evaluate the resumption of its quarterly dividend as the operating environment evolves. I want to reiterate that we remain bullish on Naoko's long-term growth prospects. Macau remains the most attractive integrated resort market in the world, benefiting from the expanding Chinese middle class and infrastructure development in the Greater Bay Area. We have one of the most exciting global development pipelines to reap benefits from the favorable market dynamics. We also have a strong balance sheet to finance those projects and to overcome the near-term challenges. With that, I'll turn the call over to Geoff. Thank you, Lawrence.