spk_0: ladies and gentlemen thank you for standing by thank you for participating in the third quarter twenty twenty one earnings conference call of medical it's offs an entertainment limited at this time all participants are in the listen only mode after the call even conduct a question and answer session today's conference is being recorded i would now like it on the gone over to is robin gun director of invested relations of medical results and entertainment limited peace proceed
spk_1: becky operator that the author john f today heart third quarter twenty twenty one earnings call on a call our lord howe jeffrey that everyone color and a puppy presidents and macau manila in cyprus before he gets started fleet know that today's discussion may contain forward looking statements made another safe harbor provision of federal securities law our actual results to differ from aren't as a result in addition we may disgust non got measures a definition and iraq affiliation of each of these letters to the most comparable gap financial measures are included in the earnings really finally please know that are supplementary earning fight or posted on our investor relations website what's that i went out hard to call over to mr hope
spk_2: robin or results in the third quarter of reflect the pandemic continue with in and the subsequent restriction on travel restrictions on our operation the flight the town and as quarter we managed to remain he been deposited in each of our geography once again we would like to thank the macau and mainland chinese government for them handling of the convent nineteen situation currently matthau city wide vaccination rate has weeks over sixty percent which will represent remarkable progress versus the thirty percent cited on all second quarter for cool with a high level of immunity as the key focus in macau we believed that continued progress toward higher machinations level of is an important step toward border reopening and a faster pace of recovery both melco and the government that actively encouraging all citizens and employees to get job as soon as possible here and malveaux we have ruled out employee that nathan incentive program to support the government's efforts to meet and community that in a single driven by our get the drop incentive program we're proud to be approaching a ninety five percent overall employee vaccination rate in macau inclusive of don't fully vaccinated and with for shot as indoor fighting the taliban and on vaccinated employees and how are required to undergo weekly any he does starting in october to protect our colleagues or gas and the broader community in our macau operations we remain even not haunted of this quarter despite his sequential decline in industry like your levels from the prime for er hoffe control measures were a primary factor about a bit off we remain optimistic that our whole business and macau will recover back to pre pandemic level once travel restrictions
spk_3: in the philippines
spk_2: while gaming and a hospitality operations at city of basement below experience period uploader with the government post stricter born a matter of want that new clothing or gaming operations were close to the general public forty two days from august six september thing
spk_4: we subsequently reopen video padilla
spk_2: on with limited capacity of the of authority mentally he wants turning to cyprus our casinos were fully open during the third quarter which drove through dissipated over the summer months
spk_5: as a result we quickly returned with positive people with set for relaxation called the related research that would commit off operate it
spk_2: which will provide for supported with discontinued or pursuit of and and greater resort and hand and will closed off there
spk_4: meanwhile malcontent remains committed to it's global have had help in macau construction studio city face to remain on we've recently talked out both cows don't reach an important milestone for the project
spk_2: we expect phase two construction to complete no later than the fabric
spk_4: in europe the construction progress of the have been mediterranean on track broke
spk_2: finally i remain optimistic and now both media and all come from boston the pants up the man from our customer is there and will be ready to enthusiasts ugly room with the don't once travel with three relax
spk_4: i'm a macabre i do with foreign policy perspective
spk_1: we firmly believe that we are helping to build macau into an even bigger better more that are like the
spk_6: with that i turned the fall for it up thank you lawrence
spk_1: in the third quarter of twenty twenty one we reported group wide property either die of approximately thirty two million while luck adjusted property but are also came in at thirty two million by region each of our geography is macau manila and cyprus all reported positive the tardis quarter at studio city yuba dog was negatively affected by an unfavorable be ip win rate by approximately four million a favorable vip win rate positively affected the dark at cod macau and cod manila by approximately two million and one million respectively overall results were not impacted as luck was neutral on a consolidated bases across our properties
spk_6: details of these adjustments can be found in the supplementary earnings was posted on our investor relations website at the end of september we had approximately one point five billion of consolidated cash on hand when combined with are under on revolver facilities in macau and manila of approximately two billion this implies available liquidity of approximately three point five billion
spk_1: to provide more clarity on our capital structure nalco excluding it's operations at studio city the philippines and cyprus had cache of approximately six hundred and twenty million and gross debt of approximately four point one billion at the end of the third quarter of twenty twenty one the revolving credit facility in macau contains requirements to comply with certain financial covenants we currently have a waiver and place through the end of twenty twenty one for these financial covenants and on november fifth we received confirmation that the majority of our lenders agreed to extend this waiver to the air end of december twenty two
spk_6: as of yesterday november eight we had received unanimous support from all of our lenders consenting to to this waiver through december of twenty twenty two moving on to our shares we recently repurchase approximately three point one million eighty asses for thirty one million two point one million shares were purchased in the third quarter and approximately one million shares were purchased in the fourth quarter to date
spk_1: recent volatility lead to what we believed to be compelling valuations and the share repurchases demonstrate confidence we have in our company and in our long term prospects
spk_0: as we normally do will give you some guidance on non operating line items for the upcoming quarter total depreciation and amortization expenses expected to be approximately one hundred and forty five million corporate expenses expected to come in at approximately eighteen to twenty million and consolidated net interest expense is expected to be a proxy
spk_7: miller eighty five to ninety million which includes finance with interest of seven million relating to city of breeze vanilla and eight to ten million of capitalized interest
spk_0: that concludes are prepared remarks operator back to you for the qnx it
spk_8: so me ladies and gentlemen v will now begin the question and answer session if you wish to ask a question each parent star one on your telephone keypad and wait for your need to be announced it comes to can keep your request you can press the pound or husky once again it's dawn followed by one on your telephone keep up
spk_9: you can just ah statements and
spk_8: the have the first was coming from the line of joe grab some jp morgan please go ahead
spk_10: good evening everybody
spk_11: lawrence i would love to get your view on this big picture topic on the mainland common prosperity is
spk_12: that of golden initiative on a happy think that impact may be negatively impact your higher and players in the future and if your answer is the think it does why is that by a hydro
spk_2: love in i think comment prosperity is you know is and then he'd been for name you know for for the party congress which is going on right now i don't think any impact ohio and player and as and that premium that i don't mean vip i mean for me i'm a at the end of the day
spk_13: while they they are still promoting the one who reduce the gap between the the highest learning he is an and the middle here but at the same time this film one of the middle path to grow and and people to in a really common prosperity referring more to
spk_8: the people and and one of the major achievements from them from name communist party over that are hundred years and taking so many people out of poverty especially in the last few years so it really about taking the low as you know that the lowest income earning people and them bringing them upstream fell on i don't think and have any impact on the on on the map business with the future of them at wow an uncle a wouldn't have a major impact on premium up the ip would be a different story but in any case the vip out story in macau
spk_1: how is they structurally and parents over it
spk_14: great and and thank you for that lines or jeff on the up the new of consent that you got to work i had some a waiver covenant at relief
spk_0: is there anything that restricts buybacks going forward
spk_15: i know there's nothing there that strict by that going forward thank you both thank you we have the next question that is coming from the line of ricardo chinchilla from don't you back please go ahead
spk_10: he guy are for get you a question of didn't count on you know
spk_16: when the announcement vulgar constipation is was announced you know you which are we not what kind of thing cause you some concerned i mean those concerns have been kind of i now did you have a chance to you know to park will be regulators and you know your vision his hang on
spk_2: it's a duty to face to do you think that side of football you know media competitive advantage for it's use your fears said you know might need to further impact as part of the consultation process i are part of why do i think the the macau bachmann has conducted a very fair and transparent also hate him for profit and we'd have summit in our lesson to all comment to them and also we really welcome how open they were in india you know them that conversation that we have ah
spk_17: so we were gonna be supportive and now i think our our concerns were really trying to get a little bit more framework on some of the issue about ever then and honestly on for all of the other all of your current though father's earning season everybody at the same view
spk_15: so i think as an industry we are a line on on that front and and frankly i think out there are commentator on the government we were ah we were assured and relieved the world unite and will continue to to to work closely with the government and we progress great ah you know i know that it did it is hard given that the situation is like you about it
spk_2: and when you think about the pagans different things do you know macau what kind of what kind of what are you here in united potato eating on the beach and situation and you know why do they are currently expecting with regards to that of the opening for later use the beer and into twenty twenty two well i i think for off it's it's really a function of the vaccination rate and in macau ah and and in today's newspaper the mccaffrey executive is currently in high income go and he's talking about potentially hitting eighty percent in macau city line and that around sixty sixty five percent so eighty proof that he feels that he has much more you know ammunition to to discuss easing of have some of these restrictions were china and so i think that will be key but as a company we are prepared for the worth and and upon about budgeting and and they're all you know given coven zero i think we're really going to be rain about for the for the next six to twelve months as long as china continues with the hiroko that cow
spk_15: we're gonna assume that there's gonna be paid fit in i think as of right now of half of the chinese provinces have cases or clothes on hat and that have the fact that travel and well so we can be conservative next year the very important near her try out from the olympics
spk_18: through the you know hong kong chief executive elect them to the twenty fifth anniversary of the hand over a long ball to of course the communist party congress next year where president he will you know can seek a third term so they're all really historic event happening they fear and thousand
spk_2: those are all reason for being super conservative in terms of opening up got it if i might lead one in given that we were talking about the future do you do anticipate to that consultation dog the concession renewal process to be embedded in june of last year to use bad you know are short term extension and that's it for me thank you
spk_19: ah law again i think we're we're working closely with the government but there is quite a process where farm they need to their legislative council when they need to change the law
spk_0: i suspect then and a good outcome from off an operator would be we would have all the details are now but in terms of i get dawning the dawning the i the crossing that he's what the government and might extend the little bit longer for a half the year or two
spk_20: but any with i would love to know that the framework of leaping fortune next year
spk_21: thank you times
spk_20: and go
spk_21: the next question comes from baby and from bank of america is go ahead hong kong the evil
spk_2: i have often questions are the first one also related to license were more powerful i'm just want to all flawless you your you ah we understand that more a lot of nepal of
spk_22: and if the if you need to look into some quick want your area of other any for punctual change got ah
spk_2: we're going to change bob blow up or the long term return on the marching i'll look for this awful on i'm looking boy will be anything that will let the can change that i'll look i don't think though villi i think we're at the company and all of the effective we all met term too long term bullish and all that of and we have been even you know the thought is really bad luck that go them week with wiped out in the whole life with like though because the cases but we certainly fall in i think they they can going to have a bit later on we saw a lot of and help the man even during both only before everything got cancelled the so
spk_21: the long term trajectory from this industry in a cow i don't think the fact that and in terms of the confession we tendering process on none of the nine point i you know when we look at it have i believe when when effect on a margin of course the continue to talk about i think the only area you know more diversification and more investment and non gaming been at the same time i do believe that that is gonna be the future because with the vip factor is being a parent the way that it isn't going forward it is gonna be you know if it's gonna be focused on math and that is gonna need more and then if he then more non gaming attraction
spk_20: thanks
spk_23: and on for shorter term our me just mention goal should be kind of on up so first of all just wonder what you guys be able to provide some color of what happened after october night nineteen when be our pointing the quantum been removed what kind of ram up the movie the me and then secondly ah of in the last few days you robbie hear about like the hong kong china potential photo we opening and mobilization so i will what's your view on done on how would that and partner pow they believe david haye so quickly maybe you know what we were set up for a really nice on the golden week and unfortunately the week before the golden week we had death of obviously very high occupancy we have a lot of people were scheduled to come
spk_24: it was kind of the as aren't those kind of a kind of a kick to the got here little bit when nasa when when unfortunately cases came back and the a cow or that being said as we came out of this and we were up to open up more fully after the nineteenth of october we've provide the nice rebound for the last week of october was very good for a very strong and you saw
spk_25: sought out there with the the numbers for from a gallon general i think the last week it's been somewhat a bit more muted i think one of the challenges that we had is one way or the the hangover little bit from people that had these years to come during the october globally though we've seen him in the last there with the last seven days or so is that we still haven't seen the dropping of the task right
spk_18: talk to get tested every forty eight hours which would love to see go back to the seven data additional edge as you look at it we've awful seen many of our customers now in these northern provinces lawrence said probably half the provinces in china have had some sort of impact or some sort of cases so right now to get into macau you have a
spk_2: a two week warranty coming from mostly northern provinces now of which i think i would just counties the little bit ago in the room probably over forty cities or district that are prevented from coming into macau without doing a to a quarantine first up there there is somewhat of a hangover relative to just the the quarantine and just other cases out there with his zero tolerance so i think that the month and of ever having to be a bit more muted for us and hopefully as these things start pouring will start seen as get back more that normal pattern like we've seen and about we saw in the first quarter of this year with on the second quarter once we come out anything things and seems to go pretty fast but again it is somewhat choppy
spk_26: as we go here
spk_2: i see and and saw and in terms of the hong kong al gore the reopening of how would that impact house village all have always been
spk_4: fifteen and twenty for sound of business and
spk_2: courtroom for my friends and hong kong people haven't gone anywhere very few months so like that empty and water with open arms between on our people will be wrapping my health i think we'll get a nice young nine ball and of had been for that long
spk_25: but i think even the whole honking their of new out an alternate were ah
spk_0: and i assume that one hall pipeline opens up and mean that on powerful enough but the thing is that there are talking about trial and all of them and of the trial of the castle maybe they banned the trial in february with an unassuming am
spk_27: everything goes right they might have the for winning in june so and that's why we have come to the the view that the next twelve months will continue to be difficult a main mouth because ah with with travel restrictions and with your horn to goldman your norway gonna be open a shot open and shut cases but once everything open up again the yeah i'm sure we're gonna follow the path that we've seen in other jurisdictions around the world where people are dying to be in the game i see thanks a lot like you the next question comes from the line of probing chaudhry from balkans damn be peace go ahead think is so much thanks for taking my question i have two questions if i mean
spk_28: the first one is about buyback so they pleased to see the by back clearly their stock the whole industry is no very cheap
spk_29: i'm wondered understand if this share buyback
spk_30: i'm we'll continue considering you're saying for the next twelve months it could be veins found so there should not be any rush to buy the stock at this level or i'm i'm getting a bit of disconnect here if i may or may be it's a long term basis it doesn't matter because this so cheap you want to use some cash especially because net that is keep rising and so using the share by my i wanted understand a little bit more the second question i have is on online gaming gaming business again a pleasing result were in manila that has started would understand if you can disclose how big was at him to treat and what's the outlook it seems like it's only for local that patrons and so currently maybe smaller but just want to see next couple years how does it evolve and the competitive landscape thank you so much i think the question in i guess and then then that you've i want wanna take the through lessons
spk_6: archer large i'm a mom diana
spk_1: and so a within the philippines obviously that there is a version of online which we are currently engaged in that's allowed i would characterize it more as a hybrid vs sort of what you think of with online gaming and that it integrates obviously into the existing player system and into the existing sort of i'm offline brick and mortar infrastructure
spk_6: i'm that guy is going to continue it is nice to have add on ah
spk_21: to our business there during the colbert period
spk_1: i think in terms of what it means going forward we anticipate for the near term it will continue to be allowed out we are working with the government in the hopes that it will continue to be an opportunity for us potentially longer term but it is a little bit early for us to comment on one of the mean
spk_31: ah longer term for us coming out of colbert i given that the commission was given sort of on a set of special circumstances
spk_27: so on the island the crush your urges
spk_32: so we've and start that we've always then a very opportunistic when it comes to share repurchases and overtime
spk_0: we have done about one point eight billion of share repurchases
spk_33: we've got out of our five hundred million dollar authorization obviously we have around four hundred and sixty nine million of that remaining are we will continue to be judicious and opportunistic as we consider additional share repurchase this quarter in into next year but ah we're not in any rush i will continue to be selective on when and how much i will be back into the market
spk_23: jeff thanks so much would you be able to disclose the average cost of for the by back into three and queue for separately pretty similar i just under ten dollars in both parents of
spk_18: thank you very much and good luck
spk_2: thanks for prevent thank you the next question comes from simon chang from goldman sachs go ahead
spk_34: ah i ah thanks for taking my question i have two questions are one are a relation to algeria remember last corner you it has talk about you know we we ramping to papa poverty and we have seen a nice our turn around a bit ah ah perhaps key shall we are you know what's going on know it and then sometime
spk_0: guidance on you know in terms of the medium time i did not generation to on that property
spk_1: the person parts and and and second quince questions on on japan and almost feel glom on now i dropped idea you know having i'll in the near future what they saw your latest thought about china japan are you even other of benson north thank you
spk_0: oh wow oh simon i take the first one and novel go from there on for out here at what look we we implemented our plan had the end of the second quarter where we reduced our cost dramatically and we transferred most of our vip business over to city dreams or studio city that process is gone very well yeah
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