Financial Performance - The group's net revenue increased by 179.5% year-on-year to HKD 29.53 billion, driven by the early lifting of COVID-19 restrictions in Macau and the openings of City of Dreams Mediterranean and the second phase of Studio City[13]. - Adjusted EBITDA rose to HKD 7.51 billion, compared to a negative adjusted EBITDA of HKD 362 million in 2022, indicating a significant recovery in operational performance[13]. - The group reported a loss of HKD 3.49 billion for the year, a substantial improvement from the loss of HKD 9.99 billion in 2022, reflecting the positive business momentum[13]. - The net revenue for the year ended December 31, 2023, was HKD 29.53 billion, a 179.5% increase compared to HKD 10.57 billion in the same period of 2022[23]. - The company reported a loss of HKD 3.49 billion for the year, significantly reduced from a loss of HKD 9.99 billion in 2022[23]. - The company's gaming revenue for 2023 reached HKD 24,090.4 million, a 185.9% increase from HKD 8,426.0 million in 2022[51]. - Adjusted EBITDA for the year ended December 31, 2023, was HKD 7,510 million, compared to a negative adjusted EBITDA of HKD 362 million in 2022[52]. - The net loss attributable to the company's owners for 2023 was HKD 1,740 million, significantly improved from a loss of HKD 5,110 million in 2022[53]. Expansion and Development - The opening of the City of Dreams Mediterranean in July 2023 marks a significant milestone in the group's expansion strategy, positioning Cyprus as a top tourist destination[6]. - The group is actively developing new concepts and strategies, including the construction of a Cineplex at Studio City and the anticipated return of the popular water show "The House of Dancing Water" by the end of 2024[13]. - The company has strategically launched a series of acclaimed experiences, including the indoor water park and the W Hotel in Macau, to attract high-end travelers[21]. - The flagship property, City of Dreams Mediterranean, opened in July 2023, featuring 500 rooms and over 8,000 square meters of meeting and exhibition space[32]. - The new indoor water park at Studio City opened in 2023, featuring multiple thrilling water slides and attractions, enhancing family entertainment options year-round[26]. Corporate Social Responsibility and Sustainability - The group has been recognized for its corporate social responsibility efforts, winning multiple awards including the "Best Overall Corporate Social Responsibility Program" at the 2023 IAG Academy IR Awards[14]. - The group aims to achieve its ambitious sustainability goals by 2030 through its "RISE" sustainability strategy, demonstrating a commitment to positive community impact[14]. - The company made over HKD 130,300,000 in donations and charitable contributions in 2023[16]. - The company aims to reduce waste and conserve water as part of its sustainability initiatives[17]. - The total greenhouse gas emissions increased from 17,688 MtCO2 in 2022 to 20,770 MtCO2 in 2023, reflecting a significant rise[18]. - Total energy consumption rose from 390,278 MWh in 2022 to 470,030 MWh in 2023[18]. - The total waste generated increased from 7,680 tons in 2022 to 15,633 tons in 2023, indicating a substantial increase in waste footprint[18]. - The company is committed to achieving carbon neutrality across its properties globally and implementing energy-saving measures[17]. - The company aims to achieve carbon neutrality and zero waste resorts by 2030, with progress updates provided to the board[157]. Governance and Leadership - The company has received multiple awards recognizing its leadership and contributions to the tourism industry, including the "Asian Best CEO" award in 2023[81]. - The company maintains a high level of corporate governance, focusing on responsible decision-making and improving transparency to shareholders[89]. - The corporate governance code has been established to guide and manage business affairs, ensuring compliance with the Hong Kong Stock Exchange's standards[90]. - The company has a written code of conduct to set ethical standards for all employees, ensuring the highest standards of integrity in business operations[91]. - The board of directors includes members with extensive experience in investment banking and corporate finance, contributing to informed decision-making[82][83]. - The company has established a governance policy for ESG matters to ensure sustainable operations and compliance with updated listing rules[145]. Employee Engagement and Diversity - The company believes that talent is key to its success and fosters a diverse and inclusive work environment, providing equal opportunities in all areas[80]. - The company has a structured approach to employee engagement, fostering a sense of belonging through recognition and participation[80]. - In 2023, 47% of the company's employees were women, with 17% of board members being female, reflecting a commitment to diversity and inclusion[161]. - The company aims to maintain at least 50% of management positions held by women by 2030[123]. - Employee training programs are systematically aligned with both personal and company needs, regularly reviewed for effectiveness[79]. Community Engagement - The company actively participates in community programs, contributing to the growth and future of the communities in which it operates[96]. - The company has initiated various community support programs, including charitable donations and volunteer activities, to address local needs and challenges[163]. - The company has strengthened cooperation with local businesses, creating economic opportunities for SMEs and micro-enterprises through various promotional events[164]. Risk Management - The Risk Management and Internal Control System aims to protect assets from misappropriation and unauthorized disposal, managing operational risks including environmental, social, and governance risks[134]. - The Audit Committee reviews the effectiveness of the risk management and internal control systems biannually[134]. - The company’s management is responsible for implementing strategies set by the board and ensuring cultural alignment across all levels[124]. Shareholder Engagement - The company encourages shareholder participation in the annual general meeting, aligning with corporate governance principles[150]. - The company’s articles of association allow shareholders to nominate candidates for the board at the annual general meeting, promoting shareholder involvement[148]. - Shareholders holding at least 5% of total voting rights can request the board to convene a meeting, ensuring their rights are protected[152].

Financial Performance - Net revenue for the year ended December 31, 2023, was HKD 29.53 billion, a 179.5% increase from HKD 10.57 billion in the previous year[3] - Adjusted EBITDA for the year ended December 31, 2023, was HKD 7.51 billion, compared to a negative HKD 362 million in the previous year[3] - Post-tax loss for the year ended December 31, 2023, was HKD 3.49 billion, a significant improvement from the HKD 9.99 billion loss in the previous year[3] - Basic loss per share attributable to the company's owners was HKD 1.16, compared to HKD 3.40 in the previous year[3] - Net asset value per share attributable to the company's owners was HKD 0.4 as of December 31, 2023, down from HKD 1.2 in the previous year[3] - The company reported a net loss of HKD 3.49 billion for 2023, an improvement from the net loss of HKD 9.99 billion in 2022[17][18] - Net revenue for 2023 was HKD 29,531.6 million, a year-on-year increase of 179.5%[80] - Adjusted EBITDA for 2023 was HKD 7,505.1 million, compared to a loss of HKD 362.0 million in 2022, representing a 2,173.4% improvement[80] - The company's attributable loss to owners was HKD 1,743.9 million, a 65.9% reduction compared to 2022[80] - Net revenue increased by 179.5% from HKD 10.57 billion in 2022 to HKD 29.53 billion in 2023, driven by the early relaxation of COVID-19 restrictions in Macau and the opening of City of Dreams Mediterranean and Studio City Phase 2[82] - Casino revenue surged by 185.9% to HKD 24.09 billion in 2023, compared to HKD 8.43 billion in 2022[83] - Adjusted EBITDA improved significantly to HKD 7.51 billion in 2023 from a negative HKD 362 million in 2022, primarily due to the relaxation of COVID-19 restrictions and the opening of Studio City Phase 2[84] - The company's attributable loss narrowed to HKD 1.74 billion in 2023 from HKD 5.11 billion in 2022, despite increased net interest expenses and impairment losses[85] Expenses and Costs - Gaming tax and license fees increased to HKD 11.66 billion from HKD 3.83 billion in the previous year[4] - Employee benefit expenses rose to HKD 6.17 billion from HKD 5.19 billion in the previous year[4] - Depreciation and amortization expenses decreased slightly to HKD 4.45 billion from HKD 4.59 billion in the previous year[4] - Operating costs and expenses for 2023 included depreciation and amortization of HKD 4.45 billion, share-based compensation of HKD 356.3 million, and pre-opening costs of HKD 327.9 million[17] - Non-operating expenses for 2023 included interest expenses of HKD 4.30 billion, other financing costs of HKD 38.0 million, and exchange gains of HKD 51.2 million[17] - The company's total non-operating expenses for 2023 were HKD 4.11 billion, compared to HKD 3.18 billion in 2022[17][18] - The company's income tax expense for 2023 was HKD 98.4 million, compared to HKD 5.6 million in 2022[17][18] - Impairment of non-financial assets increased from HK$568.25 million in 2022 to HK$1.11 billion in 2023, a growth of 96.0%[25] - Advertising and promotion expenses increased from HK$243.30 million in 2022 to HK$1.15 billion in 2023, a growth of 373.1%[25] - Employee-related costs for the year ended December 31, 2023, were HKD 6,171,200,000, up from HKD 5,187,000,000 in 2022[109] Assets and Liabilities - Total non-current assets as of December 31, 2023, were HKD 76.68 billion, down from HKD 79.79 billion in the previous year[6] - Cash and bank balances as of December 31, 2023, were HKD 10.77 billion, down from HKD 14.32 billion in the previous year[6] - Total current liabilities increased to 8,726,114 thousand HKD as of December 31, 2023, compared to 7,276,784 thousand HKD in 2022[7][8] - Net current assets decreased significantly to 4,003,439 thousand HKD in 2023 from 10,027,168 thousand HKD in 2022[8] - Total assets minus current liabilities stood at 80,685,335 thousand HKD as of December 31, 2023, down from 89,814,834 thousand HKD in 2022[8] - Non-current liabilities totaled 70,312,128 thousand HKD in 2023, a decrease from 76,428,769 thousand HKD in 2022[8] - The company's cash and bank balances amounted to 10,765,478 thousand HKD as of December 31, 2023, with unused borrowing capacity of 8,246,959 thousand HKD[11] - Total assets decreased from HK$97.09 billion in 2022 to HK$89.41 billion in 2023, a decline of 7.9%[19] - Total liabilities decreased from HK$83.71 billion in 2022 to HK$79.04 billion in 2023, a decline of 5.6%[19] - The company's equity attributable to owners decreased by 62.9% to HKD 665.0 million in 2023[81] - The company's total intangible assets and financial liabilities as of December 31, 2023, amounted to HKD 2,487,693,000, with a net book value of HKD 2,040,079,000[33] - The company's accumulated amortization of intangible assets as of December 31, 2023, was HKD 447,614,000[33] - Trade receivables as of 2023 amounted to HK$1,868,898,000, with HK$1,315,768,000 overdue by more than six months[42] - Trade payables as of 2023 totaled HK$91,807,000, with HK$58,397,000 due within one month[43] - Other payables, accrued expenses, and deposits received amounted to HK$7,982,093,000 in 2023, including HK$1,244,304,000 in gaming taxes and license fees[44] - Non-current liabilities included HK$2,203,552,000 in grants and license liabilities[45] - Total interest-bearing borrowings as of December 31, 2023, amounted to HKD 63,557,455,000, a decrease from HKD 72,211,007,000 in 2022[46] - New interest-bearing borrowings obtained in 2023 were HKD 9,811,171,000, compared to HKD 14,466,499,000 in 2022[47] - Repayments of interest-bearing borrowings in 2023 were HKD 18,633,784,000, significantly higher than HKD 215,474,000 in 2022[47] - Unsecured notes as of December 31, 2023, were HKD 47,496,913,000, slightly down from HKD 48,252,118,000 in 2022[46] - Unsecured bank loans decreased to HKD 8,222,000,000 in 2023 from HKD 14,831,845,000 in 2022[46] - Secured bank loans stood at HKD 5,135,975,000 in 2023, down from HKD 6,433,806,000 in 2022[46] - Fixed-rate borrowings were HKD 50,199,479,000 in 2023, compared to HKD 50,945,355,000 in 2022[46] - Floating-rate borrowings decreased to HKD 13,357,976,000 in 2023 from HKD 21,265,652,000 in 2022[46] - The company's borrowings denominated in USD were HKD 55,333,455,000 in 2023, down from HKD 63,780,960,000 in 2022[47] - The company repurchased USD 100,000,000 (approximately HKD 780,372,000) of 6.000% senior notes due 2025, resulting in a debt repayment gain of HKD 11,661,000[48] - The company secured a $1,000,000,000 five-year secured credit facility in 2021, consisting of a $688,000,000 term loan and a $312,000,000 revolving credit facility[51] - As of December 31, 2023, the outstanding principal amount of the restated 2021 credit facility was $658,600,000 (approximately HKD 5,144,830,000), down from $837,480,000 (approximately HKD 6,540,308,000) in 2022[53] - The company issued $350,000,000 (approximately HKD 2,733,499,000) of 7.00% senior secured notes due 2027, with net proceeds used for capital expenditures of Studio City's remaining development projects and general corporate purposes[53] - As of December 31, 2023, the company's total available and unused borrowing capacity was HKD 8,246,959,000, a significant increase from HKD 561,019,000 in 2022[54] - The company prepaid $165,120,000 (approximately HKD 1,296,147,000) of outstanding principal under the 2021 credit facility's term loan on April 26, 2023, resulting in a loss on debt modification of HKD 82,222,000 for the year ended December 31, 2023[52] - The interest rate for USD-denominated borrowings under the 2021 credit facility was revised to SOFR plus a credit spread adjustment of 0.06% and a margin of 2.35% per annum, effective June 19, 2023[52] - As of December 31, 2023, HKD 7,880,949,000 of the company's borrowings were secured by certain assets, down from HKD 9,275,637,000 in 2022[54] - The company extended the availability period of an unsecured credit facility of PHP 2,350,000,000 (approximately HKD 330,370,000) to April 30, 2024, with no material changes to terms and conditions[54] - The company's secured bank loans bear interest at HIBOR plus a margin ranging from 1.00% to 4.00% per annum or SOFR plus a credit spread adjustment of 0.06% and a margin of 2.35% per annum, denominated in HKD or USD[51] - The company received waivers for financial covenants under the 2020 credit facility for all relevant periods up to and including March 31, 2024[51] - The capital-to-debt ratio as of December 31, 2023, was 71.1%, a decrease from 74.4% in 2022[104] - The company repaid HKD 1,170,000,000 of outstanding principal under the 2020 credit facility along with accrued interest on March 28, 2024[103] - The total amount of loans secured by the company's assets as of December 31, 2023, was HKD 7,880,900,000, down from HKD 9,275,600,000 in 2022[104] - The company settled a tender offer for USD 100,000,000 (approximately HKD 780,400,000) of 2025 senior notes on November 28, 2023[103] - The company extended the availability period of an unsecured credit facility amounting to PHP 2,350,000,000 (approximately HKD 330,400,000) to April 30, 2024[103] Operations and Projects - City of Dreams Mediterranean, a new integrated resort in Cyprus, commenced operations in 2023 but has been negatively impacted by geopolitical conflicts[11] - The company implemented cost-cutting measures and rationalized capital expenditure plans to preserve cash[11] - The company believes it has sufficient resources to support operations and capital expenditures for at least the next 12 months[11] - The second phase of Studio City's expansion was completed in 2023, with the first stage opening in April and the second stage in September[11] - The company's operating segments are divided into "Casino and Hotel" and "Other," with segment performance evaluated based on Adjusted EBITDA, which excludes interest, taxes, depreciation, amortization, and other non-operating items[16] - The "Casino and Hotel" segment generated net revenue of HKD 29.55 billion in 2023, with Adjusted EBITDA of HKD 7.51 billion, compared to net revenue of HKD 10.57 billion and Adjusted EBITDA loss of HKD 356.8 million in 2022[17][18] - Total assets and liabilities are managed on a group basis, with deferred tax assets and liabilities, as well as other unallocated corporate assets and liabilities, excluded from segment reporting[16] - Net revenue from external customers in the casino and hotel segment increased from HK$6.71 billion in 2022 to HK$24.41 billion in 2023, a growth of 263.8% in Macau[22] - Non-current classified assets in Macau decreased from HK$71.88 billion in 2022 to HK$69.66 billion in 2023, a decline of 3.1%[22] - Capital expenditure in the casino and hotel segment decreased from HK$4.67 billion in 2022 to HK$1.98 billion in 2023, a decline of 57.6%[20] - Customer contract revenue increased from HK$10.22 billion in 2022 to HK$29.12 billion in 2023, a growth of 184.9%[24] - Rental income included in entertainment, retail, and other increased from HK$342.48 million in 2022 to HK$410.41 million in 2023, a growth of 19.8%[24] - Loss from joint ventures and associates decreased from HK$6.59 million in 2022 to HK$6.45 million in 2023, a decline of 2.1%[20] - The impairment of the cash-generating unit of Altira Macau was calculated based on the estimated recoverable amount of HKD 875,115,000 as of December 31, 2022, using a pre-tax discount rate of 14.11%[26] - The company's income tax expense for 2023 was HKD 98,363,000, compared to HKD 5,634,000 in 2022, with significant increases in Hong Kong profits tax and Macau supplementary tax on dividends[27] - Altira Macau was granted an extension of the exemption from Macau supplementary tax on gaming profits from January 1, 2023, to December 31, 2027[28] - Altira Macau entered into agreements with the Macau government for payments in lieu of Macau supplementary tax on dividends from gaming profits, totaling HKD 44,165,000 for 2023[29] - The company did not recommend any dividends for the years ended December 31, 2023, and 2022[30] - The company's basic and diluted loss per share attributable to owners was HKD 1,743,932,000 for 2023, compared to HKD 5,115,881,000 in 2022[31] - Intangible assets increased to HKD 19,357,150,000 in 2023 from HKD 17,319,114,000 in 2022, primarily due to gaming concessions and licenses[32] - The company confirmed intangible assets and financial liabilities of MOP 1,934,035,000 (approximately HKD 1,877,704,000) related to the use and operation rights of reversionary assets and the obligation to pay fixed and floating gaming premiums under the concession[35] - The company was granted a 10-year gaming concession by the Macau government, effective from January 1, 2023, to December 31, 2032, with an annual fixed gaming premium of MOP 30,000,000 (approximately HKD 29,126,000) and additional floating premiums based on the number and type of gaming tables and machines[34] - The company's gaming concession includes the operation of five entertainment venues in Macau, with a minimum requirement of 500 gaming tables and 1,000 gaming machines[34] - The company's intangible assets related to the gaming concession are amortized on a straight-line basis over the 10-year concession period[35] - The company's subsidiary in Cyprus was granted a 30-year gaming license, with an initial annual license fee of EUR 2,500,000 (approximately HKD 21,618,000) for the first four years, increasing to EUR 5,000,000 (approximately HKD 43,236,000) for the subsequent four years[36] - The Cyprus gaming license requires the opening of the City of Dreams Mediterranean by June 30, 2023, with the possibility of termination by the Cyprus government if this deadline is not met[36] - The company's gaming concession in Macau includes the transfer of reversionary assets from the Macau government, with concession fees ranging from MOP 750 (approximately HKD 730) per square meter for the first three years to MOP 2,500 (approximately HKD 2,400) per square meter for the remaining seven years[34] - The company recognized intangible assets of €68,031,000 (approximately HK$579,505,000) and financial liabilities of €67,

Financial Performance - The group's net revenue for the six months ended June 30, 2023, was HKD 13,040 million, an increase of 116.4% compared to HKD 6,030 million in the same period of 2022[4]. - The group reported a loss of HKD 1,400 million for the six months ended June 30, 2023, significantly reduced from a loss of HKD 4,580 million in the same period of 2022[4]. - Adjusted EBITDA surged by 1,804.6%, reaching HKD 3,202.6 million compared to HKD 168.2 million in the same period last year[27]. - The loss attributable to the company's owners decreased by 69.1%, from HKD 2,374.6 million to HKD 733.2 million[28]. - The basic loss per share improved from HKD 1.58 to HKD 0.49, reflecting a 69.1% reduction in losses[29]. - Total operating revenue for the company's gaming operations rose by 118.6%, from HKD 4,904.9 million to HKD 10,723.3 million[26]. - The total comprehensive loss for the six months ended June 30, 2023, was HKD 1,556,816, down from HKD 5,186,383 in the same period of 2022, reflecting a 70.0% reduction[64]. - The total loss before tax for the six months ended June 30, 2023, was HKD 1,414,071, compared to a loss of HKD 4,555,942 in 2022, showing an improvement of 69.0%[63]. Operational Developments - The second phase of Studio City and the indoor water park opened in April 2023, contributing to the recovery of the group's operations[4]. - The City of Dreams Mediterranean in Cyprus officially opened in July 2023 after a successful trial operation in June 2023[3]. - The flagship integrated resort, City of Dreams, has approximately 430 gaming tables and 637 gaming machines as of the first half of 2023[6]. - The new hotel, Starry Suites, featuring 338 luxurious suites, was launched in April 2023, showcasing the group's commitment to providing exceptional service[7]. - The "Exclusive Series Concert" featuring numerous superstars commenced in April 2023, with a total of 90 performances planned over three years[8]. - The group plans to open the Macau Studio City W Hotel in September 2023, adding approximately 560 rooms and several new non-gaming attractions[14]. - The group continues to operate three satellite casinos in Cyprus, contributing to the expansion of its business in the region[12]. Visitor Trends - In the first half of 2023, the number of visitors to Macau increased by 236.1% year-on-year to 11.65 million, with an average of over 64,000 daily visitors, reaching 59.6% of pre-pandemic levels[14]. - Macau's total gaming revenue increased by 205% year-on-year in the first half of 2023, with the group's direct VIP room business surpassing the performance of the same period in 2019[3]. Sustainability Initiatives - The group aims to replace single-use plastic bottles with reusable glass bottles across all operations, having already reduced over 1.4 million single-use plastic bottles in Macau and Manila[22]. - The group has committed to sourcing only cage-free eggs by 2025, with 100% of eggs supplied at City of Dreams Manila already being cage-free since March 2022[22]. - The group received the "Best Environmental Responsibility Award" at the Asia Excellence Awards 2023, highlighting its commitment to environmental sustainability[22]. Awards and Recognition - The group achieved 97 stars in the Forbes Travel Guide 2023, maintaining its leading position among integrated resort operators in Macau and Asia[18]. - The group’s properties received a total of 17 five-star honors in the Forbes Travel Guide, with the Macau property, Studio City, winning five-star recognition for 14 consecutive years[18]. - The group’s restaurants earned seven stars in the Hong Kong Macau Michelin Guide 2023, making it one of the operators with the most Michelin stars in Macau[19]. - The City of Dreams Mediterranean project in Europe won the "Best Hotel Architecture in Cyprus" and "Best New Hotel Construction and Design in Cyprus" at the 2023 European Real Estate Awards[19]. Employee and Talent Development - The total number of employees as of June 30, 2023, was 19,676, up from 17,270 in 2022, representing an increase of 13.9%[58]. - The group’s "Career Advancement Program" was awarded the ATD Excellence in Practice Award 2023, reflecting its commitment to talent development[20]. - The group’s "Reach! New Macau Sports Elite Training Program" encourages employees to adopt healthier lifestyles through sports and physical activities[20]. Financial Position and Debt Management - The total assets decreased by 3.2% from HKD 97,091.6 million to HKD 93,946.1 million[24]. - The total liabilities also decreased by 2.2%, from HKD 83,705.6 million to HKD 81,840.6 million[24]. - The capital debt ratio improved to 71.2% as of June 30, 2023, compared to 74.4% at the end of 2022[51]. - The group has available undrawn borrowing capacity of HKD 4.84 billion as of June 30, 2023, significantly up from HKD 0.56 billion at the end of 2022[48]. - The group repaid principal amounts of HKD 5.31 billion and USD 1.12 billion during the reporting period[49]. Corporate Governance - The company has established a corporate governance code to ensure high transparency and accountability to shareholders[182]. - The audit committee consists of one non-executive director and two independent non-executive directors, responsible for reviewing financial reports and risk management[185]. - The company has complied with its corporate governance code throughout the six months ending June 30, 2023, except for certain deviations[182]. Future Outlook - The company provided an optimistic outlook for the second half of 2023, projecting a revenue growth of 20% to 30%[188]. - New product launches are expected to contribute an additional HKD 1 billion in revenue by the end of 2023[188]. - The company is expanding its market presence in Southeast Asia, targeting a 10% market share by 2025[188].

Financial Performance - For the six months ended June 30, 2023, net revenue was HKD 13.04 billion, an increase of HKD 7.01 billion or 116.4% compared to HKD 6.03 billion for the same period in 2022[3]. - Adjusted EBITDA for the six months ended June 30, 2023, was HKD 3.20 billion, compared to HKD 168.2 million for the same period in 2022[3]. - The after-tax loss for the six months ended June 30, 2023, was HKD 1.40 billion, a significant improvement from an after-tax loss of HKD 4.58 billion for the same period in 2022[3]. - Basic loss per share attributable to owners of the company for the six months ended June 30, 2023, was HKD 0.49, compared to HKD 1.58 for the same period in 2022[3]. - The company reported a loss attributable to owners of HKD 4,197,202,000 for the period[8]. - The group reported a pre-tax loss of HKD 733,248,000 for the six months ended June 30, 2023, compared to a loss of HKD 2,374,583,000 for the same period in 2022, indicating a significant improvement[32]. - The company reported a net loss of HKD 1,402,622,000 for the six months ended June 30, 2023, compared to a net loss of HKD 4,579,376,000 for the same period in 2022, showing a reduction in losses[21][22]. Assets and Liabilities - Non-current assets as of June 30, 2023, totaled HKD 79.88 billion, slightly up from HKD 79.79 billion as of December 31, 2022[7]. - Current assets as of June 30, 2023, amounted to HKD 14.07 billion, down from HKD 17.30 billion as of December 31, 2022[7]. - As of June 30, 2023, the total current liabilities amounted to HKD 8,310,183,000, an increase of 14.2% from HKD 7,276,784,000 as of December 31, 2022[8]. - The net current assets decreased to HKD 5,755,960,000 from HKD 10,027,168,000, reflecting a decline of 42.6%[8]. - Non-current liabilities totaled HKD 73,530,401,000, down 3.7% from HKD 76,428,769,000[8]. - The company's equity decreased to HKD 12,105,562,000 from HKD 13,386,065,000, representing a decline of 9.5%[8]. - The total assets as of June 30, 2023, amounted to HKD 93,946,146,000, while total liabilities were HKD 81,840,584,000, reflecting a stable financial position[23]. Revenue Sources - The revenue from external customers in Macau for the six months ended June 30, 2023, was HKD 10,619,906,000, up from HKD 4,147,205,000 in the same period of 2022, marking an increase of approximately 156.5%[25]. - Customer contract revenue for the six months ended June 30, 2023, reached HKD 12,844,373,000, compared to HKD 5,843,392,000 for the same period in 2022, indicating a growth of approximately 119.5%[28]. - Casino revenue surged by 118.6% to HKD 10,723.3 million, up from HKD 4,904.9 million in the prior year[78]. - Non-gaming revenue for the six months ended June 30, 2023, totaled USD 127.2 million, compared to USD 62.1 million in the same period of 2022, indicating a strong recovery in this segment[83]. Operational Developments - The first phase of the City of Dreams Mediterranean opened on June 12, 2023, with full public access starting July 10, 2023[11]. - The second phase of the Studio City development is expected to open in September 2023[11]. - The company opened the Starry Sky and indoor water park in April 2023, contributing to improved operational performance[77]. - The group launched the second phase of Studio City and the first concert series featuring Asian superstars, enhancing market share growth[58]. - The group is upgrading facilities at Studio City, with the return of the show "The House of Dancing Water" expected in 2024[61]. Corporate Governance and Strategy - The board of directors recommended not to declare an interim dividend for the six months ended June 30, 2023[3]. - The company has established various board committees to maintain high corporate governance standards, including an Executive Committee and an Audit Committee[109]. - The company has not engaged in any purchases, sales, or redemptions of its listed securities during the six months ended June 30, 2023[112]. - The company has not conducted any foreign exchange hedging transactions for operational cash flows during the review period[102]. Market and Economic Conditions - The impact of the COVID-19 pandemic and geopolitical tensions continues to create uncertainty for future operational performance[11]. - Macau's tourism saw a significant recovery, with visitor numbers increasing by 236.1% year-on-year to 11.65 million in the first half of 2023, reaching an average of over 64,000 daily visitors[67]. - The Philippines' tourism industry is also recovering strongly, with over 3.2 million inbound travelers recorded in the first seven months of 2023[67]. Sustainability and Social Responsibility - The company aims to eliminate 14.8 million plastic bottles annually by fully implementing the NORDAQ filtration system across all properties in Macau[74]. - The company has committed to sourcing 100% cage-free eggs by 2025, with current operations in Manila already achieving this goal[75]. - The company received the "Best Environmental Responsibility Award" at the Asia Excellence Awards 2023, highlighting its commitment to sustainability[75]. Employee and Workforce - The total number of employees as of June 30, 2023, was 19,676, an increase from 17,270 as of June 30, 2022[105]. - Employee costs for the six months ended June 30, 2023, were HKD 2,991,700,000, compared to HKD 2,606,700,000 for the same period in 2022[105].

Financial Performance - Net revenue decreased by 32.4% to HKD 10.57 billion, compared to HKD 15.64 billion for the year ended December 31, 2021[11]. - Adjusted EBITDA was negative HKD 362 million, down from HKD 1.54 billion for the year ended December 31, 2021[11]. - Net loss after tax was HKD 9.99 billion, compared to a net loss of HKD 7.94 billion for the year ended December 31, 2021[11]. - The group's net revenue for the year ended December 31, 2022, was HKD 10.57 billion, a decrease of 32.4% compared to HKD 15.64 billion in the same period of 2021[27]. - The group reported a loss of HKD 9.99 billion for the year, compared to a loss of HKD 7.94 billion in 2021[27]. - The loss attributable to shareholders increased by 34.2% to HKD 5,110 million in 2022 from HKD 3,810 million in 2021[54]. - Casino revenue fell by 35.3% to HKD 8,426 million in 2022, down from HKD 13,030 million in 2021[52]. - Hotel room revenue decreased by 25.5% to HKD 912.7 million in 2022 compared to HKD 1,224.6 million in 2021[52]. - Total operating revenue for Melco Resorts and Entertainment was $559.7 million for the year ended December 31, 2022, down from $1,146.9 million in 2021, representing a decrease of 51.1%[58]. - Adjusted property EBITDA for Melco Resorts was negative $32.2 million in 2022, compared to positive $202 million in 2021[58]. Operational Developments - The gaming revenue in the Philippines has rebounded to near pre-pandemic levels, while Cyprus's gaming revenue exceeded pre-pandemic levels in Q4 2022[12]. - The opening of the second phase of Studio City and City of Dreams Mediterranean in Cyprus is expected in 2023, aiming to meet pent-up travel demand[12]. - The company reported a significant increase in visitor numbers to Macau since the easing of social distancing measures on January 8, 2023, indicating a positive outlook for the region[24]. - The company anticipates strong performance during the upcoming Spring Festival, with both foot traffic and revenue maintaining substantial levels[24]. - The first phase of the new Studio City Phase 2 is set to open in Q2 2023, featuring a new hotel and an all-weather water park, aimed at attracting more visitors[24]. - The company is optimistic about its Cyprus operations, which have shown improved profitability as pandemic restrictions are lifted, with the City of Dreams Mediterranean set to open in Q2 2023[24]. - The group’s gaming operations in the Philippines have fully reopened since March 1, 2022, with gaming volumes recovering towards pre-pandemic levels[26]. - The total operating revenue for City of Dreams Manila increased to $396.4 million in 2022, up from $268.6 million in 2021, marking a growth of 47.5%[66]. - Cyprus operations generated total revenue of $91.3 million in 2022, an increase from $52.6 million in 2021, representing a growth of 73.5%[68]. Sustainability and Corporate Social Responsibility - The company is committed to sustainable development and has received recognition for its efforts in corporate social responsibility and sustainability initiatives[13]. - The total greenhouse gas emissions increased to 17,688 MtCO2e in 2022 from 15,387 MtCO2e in 2021[16]. - Total energy consumption rose to 390,278 MWh in 2022, up from 383,628 MWh in 2021[17]. - Charitable contributions exceeded HKD 63.88 million in 2022, with over 22,000 volunteer hours logged[14]. - The company aims for carbon neutrality and zero waste at its resorts by 2030[48]. - The company is committed to supporting sustainable and diversified development in Macau's tourism and leisure industry, backed by a new ten-year gaming license[36]. - The company has implemented various community support initiatives, including volunteer activities and charitable donations, to address the needs of vulnerable community members[158]. Corporate Governance - The company has maintained a high level of corporate governance, focusing on responsible decision-making and improving transparency to shareholders[93]. - The board includes experienced independent non-executive directors with backgrounds in law, finance, and media, enhancing the company's governance structure[89][90]. - The company emphasizes risk management and aims to enhance overall performance through improved governance practices[93]. - The audit committee and remuneration committee are composed of independent directors, ensuring unbiased oversight of financial reporting and executive compensation[88][89]. - The company has established a governance policy for environmental, social, and governance (ESG) matters to ensure sustainable operations and compliance with listing rules[138]. - The company has established its own corporate governance code to ensure high transparency and accountability to shareholders[94]. - The board of directors regularly reviews and updates the governance guidelines, policies, and procedures in accordance with applicable laws and market practices[95]. Employee Engagement and Development - The company emphasizes the importance of talent and aims to create a supportive work environment, promoting diversity and equal opportunities across all areas[81]. - The company is committed to providing employee training to enhance skills necessary for business development, aligning training goals with desired outcomes[83]. - The company has established a strong learning and development culture to support the holistic development of its employees, offering competitive compensation and wellness programs[156]. - The company expanded its mental health program "Feel Better" and launched the "Reach! Elite Sports Talent Development Program" to promote employee well-being[152]. - The company’s training completion rate for occupational safety and health measures reached 99.5% in 2022, indicating significant progress in enhancing employee safety awareness[41]. Market Position and Competitive Advantage - The company has established a competitive advantage in the high-end mass market segment, which is expected to drive overall market recovery in Macau[25]. - The company has successfully positioned itself as a leader in the entertainment and leisure industry, with a focus on innovative products and services[20]. - The company is focused on expanding its market presence and enhancing its operational capabilities through strategic initiatives and potential acquisitions[79]. Shareholder Communication and Rights - The company has a framework for effective communication with shareholders, ensuring their rights are upheld[145]. - The company held its 2022 Annual General Meeting in a hybrid format, allowing shareholders to participate both in-person and online, addressing public health concerns during the COVID-19 pandemic[147]. - Shareholders holding at least 5% of total voting rights can request a special meeting, and those with at least 2.5% can propose resolutions at the annual general meeting[143]. Awards and Recognition - The company received the "Corporate Social Responsibility Award" at the 2022 Asia Global Gaming Awards for its community contributions[7]. - Melco International received multiple awards for outstanding corporate governance, including being named "Best Investor Relations Company" for the 11th time by Asia Corporate Governance Magazine in 2022[40]. - The company was awarded the "Best Responsible Gaming Program" at the 2023 Asia Gaming Awards, further validating its efforts in promoting responsible gaming culture[46]. - Melco International achieved 97 Forbes stars in 2023, including 17 five-star awards, showcasing its commitment to high-quality service[47].

Financial Performance - Net revenue for the year ended December 31, 2022, was HKD 10.57 billion, a decrease of HKD 5.07 billion or 32.4% compared to HKD 15.64 billion for the year ended December 31, 2021[3]. - Adjusted EBITDA for the year ended December 31, 2022, was a negative HKD 362 million, down from positive HKD 1.54 billion for the year ended December 31, 2021[3]. - The net loss attributable to shareholders for the year ended December 31, 2022, was HKD 9.99 billion, compared to a net loss of HKD 7.94 billion for the year ended December 31, 2021[3]. - Basic loss per share attributable to shareholders for the year ended December 31, 2022, was HKD 3.40, compared to HKD 2.52 for the year ended December 31, 2021[3]. - The company recorded a total comprehensive loss of HKD 10.26 billion for the year ended December 31, 2022, compared to HKD 8.48 billion for the year ended December 31, 2021[6]. - The company reported a loss before tax of HKD 9,981,683 for the year ended December 31, 2022, compared to a loss of HKD 7,899,979 for the year ended December 31, 2021, reflecting an increase in losses of approximately 26.1%[22][23]. - The company reported a loss attributable to owners of the company of HKD 5,113,127 thousand for 2022, compared to a loss of HKD 3,808,968 thousand in 2021, representing an increase in loss of approximately 34.1%[40]. Assets and Liabilities - Total non-current assets as of December 31, 2022, amounted to HKD 79.79 billion, an increase from HKD 78.98 billion as of December 31, 2021[7]. - Current assets as of December 31, 2022, totaled HKD 17.30 billion, compared to HKD 15.21 billion as of December 31, 2021[7]. - Total assets as of December 31, 2022, amounted to HKD 97,091,618, an increase from HKD 94,193,277 in 2021, representing a growth of approximately 3.0%[24]. - Total liabilities increased to HKD 83,705,553 in 2022 from HKD 71,725,269 in 2021, reflecting a rise of about 16.6%[24]. - The company's equity decreased to HKD 13,386,065 from HKD 22,468,008, a decline of 40.3%[8]. - The company reported a significant drop in total equity attributable to owners, down to HKD 1,791,305 from HKD 6,862,667, a decrease of 73.9%[8]. Operational Challenges - The impact of COVID-19 continued to significantly affect the company's operations, particularly in Macau due to travel restrictions[11]. - The company faced a 12-day mandatory closure of its casinos in Macau during July 2022, which impacted revenue generation[11]. - The company experienced a significant decrease in gaming tax and license fees, which were HKD 3.83 billion for the year ended December 31, 2022, down from HKD 6.55 billion in the previous year[4]. Strategic Developments - The company is actively expanding its operations in Cyprus with the development of City of Dreams Mediterranean, which is expected to enhance its market presence in Europe[9]. - The group anticipates the opening of the first phase of City of Dreams Mediterranean in the second quarter of 2023, with the second phase expected in the third quarter of 2023[13]. - The Macau government has granted a ten-year gaming concession to Melco Resorts (Macau) Limited, effective from January 1, 2023, to December 31, 2032[15]. Cost Management - The group has implemented cost-cutting measures to mitigate challenges posed by the COVID-19 pandemic, including postponing and reducing capital expenditures[14]. - The company incurred total operating expenses of HKD 4,586,000, with significant costs attributed to depreciation and amortization, share-based compensation, and other operational expenditures[22]. Corporate Governance and Compliance - The audit committee held three meetings during the year to review the financial reporting process and monitor risk management and internal control systems[140]. - The company has established various board committees to maintain high corporate governance standards[138]. - The board of directors consists of three executive directors, one non-executive director, and three independent non-executive directors as of the announcement date[144]. Sustainability and Community Engagement - The company aims to achieve carbon neutrality and zero waste in its resorts by 2030 or earlier[104]. - The company received the "Sustainable Development Award" at the International Gaming Awards in 2022 for its commitment to sustainability[104]. - Over 20,000 volunteer hours were contributed by the company in 2022, participating in more than 2,200 volunteer activities[101]. Future Outlook - Visitor numbers to Macau surged following the easing of social distancing measures on January 8, 2023, indicating a positive outlook for the region[83]. - The company aims to leverage its competitive advantages in the high-end mass market segment to drive overall recovery in the Macau market[84]. - The company plans to enhance its entertainment experiences with a series of exciting projects, including concerts featuring major superstars starting in April 2023[83].

Stock Options - Melco International Development Limited granted a total of 4,355,496 stock options on April 7, 2021, of which 3,970,152 were awarded to employees, representing approximately 0.03% of the total shares issued at that time[3] - An additional 251,388 stock options were granted on June 11, 2021, with 245,106 options awarded to employees, equating to about 0.0004% of the total shares issued at that date[5] Company Operations - The company operates integrated resort facilities in Asia and Europe, with its American Depositary Shares listed on the NASDAQ Global Select Market[6]

Management Discussion and Analysis [Significant Events and Developments](index=4&type=section&id=重要事件及發展) The group faced significant COVID-19 impacts in H1 2022, particularly in Macau, while operations in the Philippines and Cyprus showed continuous improvement and revenue recovery. - COVID-19 continued to significantly impact the group's operations and financial performance, with Macau's gross gaming revenue decreasing by **46.4%** due to rising mainland China cases and travel restrictions[4](index=4&type=chunk) - Philippines and Cyprus operations showed continuous improvement, with revenue gradually recovering to pre-pandemic levels; the Philippines fully reopened in March 2022, increasing gross gaming revenue by nearly **40%** quarter-on-quarter[4](index=4&type=chunk)[5](index=5&type=chunk) - Studio City Phase 2 construction progressed well, with phased openings expected from **Q2 2023**, while City of Dreams Mediterranean faced contractor delays, now anticipated to open in **early Q2 2023**[4](index=4&type=chunk)[5](index=5&type=chunk) - Macau's gaming law amendment bill passed in June 2022, extending Melco Resorts & Entertainment (Macau)'s gaming sub-concession until **December 31, 2022**[5](index=5&type=chunk) [Business Review](index=5&type=section&id=業務回顧) The group, primarily through its 55.8% owned subsidiary Melco Resorts & Entertainment, saw net revenue decline by 28.5% to HKD 6.03 billion in H1 2022, with loss for the period expanding to HKD 4.58 billion due to Macau's pandemic restrictions. | Indicator | Six Months Ended June 30 (HKD Million) | | :--- | :--- | | | **2022** | **2021** | | **Net Revenue** | 6,030 | 8,430 | | **Loss for the Period** | 4,580 | 3,750 | - The group primarily operates its gaming business through its subsidiary Melco Resorts & Entertainment, in which it held approximately **55.8%** equity as of June 30, 2022[6](index=6&type=chunk) [City of Dreams (Macau)](index=6&type=section&id=新濠天地) As the group's flagship integrated resort, City of Dreams (Macau) was severely impacted by the pandemic in H1 2022, experiencing significant declines in both total operating revenue and Adjusted Property EBITDA. | Indicator (USD Million) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **Total Operating Revenue** | 354.1 | 650.1 | | **Adjusted Property EBITDA** | 15.9 | 119.6 | | Gaming Operations Performance (USD Million) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **VIP Rolling Chip Turnover** | 3,197.2 | 8,687.3 | | **Mass Market Table Games Drop** | 761.7 | 1,537.7 | [Studio City (Macau)](index=7&type=section&id=新濠影滙) Studio City Phase 2 construction is progressing with a USD 1.2 billion budget, expected to open in phases starting Q2 2023, while H1 performance was weak with a significant decline in total operating revenue and a worsening negative Adjusted Property EBITDA. - Studio City Phase 2 construction budget is **USD 1.2 billion**, with phased openings anticipated from **Q2 2023**, adding **900 hotel rooms**, a large water park, and MICE facilities[11](index=11&type=chunk) | Indicator (USD Million) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **Total Operating Revenue** | 107.0 | 202.3 | | **Adjusted Property EBITDA** | (48.4) | (6.4) | [Altira Macau](index=8&type=section&id=澳門新濠鋒) Since Q3 2021, Altira Macau has repositioned to focus on the mass and premium mass markets, closing its VIP gaming business, resulting in lower total operating revenue but a narrowed negative Adjusted Property EBITDA in H1. - Since **Q3 2021**, Altira Macau has strategically repositioned, closing its VIP gaming business to focus on the premium mass market[12](index=12&type=chunk)[34](index=34&type=chunk) | Indicator (USD Million) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **Total Operating Revenue** | 21.2 | 32.7 | | **Adjusted Property EBITDA** | (20.6) | (46.9) | [Mocha Clubs](index=8&type=section&id=摩卡娛樂場) As Macau's largest non-casino electronic gaming machine operation, Mocha Clubs maintained relatively stable performance in H1, with slight decreases in both total operating revenue and Adjusted Property EBITDA. | Indicator (USD Million) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **Total Operating Revenue** | 38.1 | 42.0 | | **Adjusted Property EBITDA** | 6.8 | 7.4 | [City of Dreams (Manila)](index=8&type=section&id=新濠天地（馬尼拉）) Benefiting from eased pandemic restrictions in the Philippines, City of Dreams (Manila) has been fully operational since March 2022, showing strong H1 performance with significant growth in total operating revenue and Adjusted Property EBITDA. | Indicator (USD Million) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **Total Operating Revenue** | 198.6 | 132.2 | | **Adjusted Property EBITDA** | 82.0 | 42.7 | | Gaming Operations Performance (USD Million) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **VIP Rolling Chip Turnover** | 1,419.2 | 544.0 | | **Mass Market Table Games Drop** | 305.7 | 169.3 | | **Gaming Machine Handle** | 1,702.3 | 969.9 | [City of Dreams Mediterranean and Cyprus Casinos (C2)](index=9&type=section&id=City%20of%20Dreams%20Mediterranean及塞浦路斯娛樂城) Cyprus operations significantly improved in H1 due to eased pandemic restrictions, with substantial growth in total operating revenue and a shift from negative to positive Adjusted Property EBITDA, while the flagship City of Dreams Mediterranean is expected to open in early Q2 2023. | Indicator (USD Million) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **Total Operating Revenue** | 37.8 | 10.0 | | **Adjusted Property EBITDA** | 6.5 | (7.2) | - The City of Dreams Mediterranean project experienced construction delays due to contractor difficulties and is now expected to open in **early Q2 2023**[17](index=17&type=chunk) [Outlook](index=10&type=section&id=展望) The group anticipates continued pandemic impact in H2, with recovery dependent on eased travel restrictions and restored consumer confidence, while the Philippines and Cyprus show optimistic prospects. - The COVID-19 pandemic is expected to continue impacting the group's operations, financial condition, and outlook in the second half of the year[18](index=18&type=chunk) - Macau implemented static management in July due to a COVID-19 outbreak, resulting in a **12-day casino closure** and strict epidemic prevention requirements upon reopening[18](index=18&type=chunk) - Philippines operations have been fully operational since March, with strong growth in international flight bookings, anticipating further growth in the second half of the year[18](index=18&type=chunk) - Cyprus operations rebounded due to tourism recovery, with visitor arrivals increasing by **258.2%** year-on-year in H1 2022, benefiting the City of Dreams Mediterranean expected to open in 2023[18](index=18&type=chunk) [Achievements and Awards](index=11&type=section&id=成就及獎項) The group received multiple accolades for corporate governance, social responsibility, talent development, business operations, and environmental sustainability, with its hotels and restaurants earning star ratings from Forbes Travel Guide and Michelin Guide. - Business Excellence: Melco Resorts & Entertainment earned **97 stars** in the Forbes Travel Guide 2022, and four of its premium restaurants received **seven stars** in the Michelin Guide Hong Kong Macau 2022[24](index=24&type=chunk) - Corporate Social Responsibility: Actively supported Macau government's anti-epidemic measures, mobilized volunteers for nucleic acid testing, and organized events generating nearly **MOP 4.4 million** in revenue for local SMEs[21](index=21&type=chunk)[23](index=23&type=chunk) - Environmental Sustainability: Committed to achieving **carbon neutrality** and **zero waste** by 2030 or earlier through its "Beyond Boundaries" sustainability strategy, earning the 2022 International Gaming Awards' Sustainability Award[25](index=25&type=chunk) [Financial Review](index=14&type=section&id=財務回顧) In H1 2022, the group's net revenue decreased by 28.5% to HKD 6.025 billion, Adjusted EBITDA declined by 77.0% to HKD 168.2 million, and loss attributable to owners expanded to HKD 2.375 billion, primarily due to tightened travel restrictions in Macau and mainland China. | Financial Indicator (HKD Million) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | **Year-on-Year Change** | | **Net Revenue** | 6,025.1 | 8,425.3 | -28.5% | | **Adjusted EBITDA** | 168.2 | 732.5 | -77.0% | | **Loss Attributable to Owners of the Company** | (2,374.6) | (1,647.6) | -44.1% | | **Basic Loss Per Share (HKD)** | (1.58) | (1.09) | -45.1% | | Financial Position (HKD Million) | As of June 30, 2022 | As of December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | 94,988.0 | 94,193.3 | | **Total Liabilities** | 76,647.9 | 71,725.3 | | **Gearing Ratio (%)** | 67.6% | 61.4% | [Liquidity, Financial Resources and Capital Structure](index=22&type=section&id=流動資金、財務資源及資本結構) The group prudently managed its financial position, holding HKD 13.165 billion in cash and bank balances and HKD 9.02 billion in available borrowing capacity as of June 30, 2022, with the gearing ratio increasing to 67.6%. - As of June 30, 2022, the group held bank balances and cash of **HKD 13.165 billion** and had available borrowing capacity of **HKD 9.02 billion**[50](index=50&type=chunk) - Key debt changes during the period included: issuance of **USD 350 million** in senior secured notes; and drawing **USD 420 million** from a revolving credit facility[50](index=50&type=chunk) - The gearing ratio (total interest-bearing borrowings/total assets) increased from **61.4%** at the end of 2021 to **67.6%** as of June 30, 2022[53](index=53&type=chunk)[27](index=27&type=chunk) [Human Resources](index=24&type=section&id=人力資源) As of June 30, 2022, the group's total number of employees was 17,270, a decrease from the prior year, with related employee costs of HKD 2.607 billion for H1. | Indicator | As of June 30, 2022 | As of June 30, 2021 | | :--- | :--- | :--- | | **Total Number of Employees** | 17,270 persons | 18,178 persons | | **Employee Costs (HKD Million)** | 2,606.7 | 3,034.0 | Interim Financial Information Review Report [Auditor's Review Conclusion](index=25&type=section&id=核數師審閱結論) Ernst & Young conducted a review of the interim financial information in accordance with HKSRS 2410, concluding that nothing came to their attention to suggest the information was not prepared in all material respects according to HKAS 34. - The review was conducted in accordance with Hong Kong Standard on Review Engagements **2410**, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity"[61](index=61&type=chunk) - Conclusion: We have not become aware of any material modifications that should be made to the interim financial information for it to be prepared in accordance with Hong Kong Accounting Standard **34**[62](index=62&type=chunk) Condensed Consolidated Interim Financial Statements [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=26&type=section&id=簡明綜合損益及其他全面收益表) In H1 2022, the group's net revenue decreased by 28.5% to HKD 6.025 billion, operating loss expanded to HKD 3.024 billion, and total loss for the period increased to HKD 4.579 billion, with loss attributable to owners at HKD 2.375 billion. | Indicator (HKD Thousand) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **Net Revenue** | 6,025,107 | 8,425,275 | | **Operating Loss** | (3,024,122) | (2,574,752) | | **Loss for the Period** | (4,579,376) | (3,754,765) | | **Loss Attributable to Owners of the Company** | (2,374,583) | (1,647,621) | [Condensed Consolidated Statement of Financial Position](index=28&type=section&id=簡明綜合財務狀況表) As of June 30, 2022, the group's total assets were HKD 94.988 billion, total liabilities were HKD 76.648 billion, and net assets were HKD 18.340 billion, with a net current liability of HKD 248 million. | Indicator (HKD Thousand) | As of June 30, 2022 | As of December 31, 2021 | | :--- | :--- | :--- | | **Total Non-current Assets** | 80,180,608 | 78,979,622 | | **Total Current Assets** | 14,807,406 | 15,213,655 | | **Total Assets** | 94,988,014 | 94,193,277 | | **Total Current Liabilities** | 15,055,167 | 12,731,552 | | **Total Non-current Liabilities** | 61,592,708 | 58,993,717 | | **Total Liabilities** | 76,647,875 | 71,725,269 | | **Total Equity** | 18,340,139 | 22,468,008 | [Condensed Consolidated Statement of Changes in Equity](index=30&type=section&id=簡明綜合權益變動報表) For the six months ended June 30, 2022, the group's total equity decreased by HKD 4.128 billion from HKD 22.468 billion to HKD 18.340 billion, primarily due to a total comprehensive loss of HKD 5.186 billion. - Total equity decreased from **HKD 22.468 billion** at the beginning of the period to **HKD 18.340 billion** at the end of the period[70](index=70&type=chunk) - The decrease in equity was primarily due to a total comprehensive loss of **HKD 5.186 billion** for the period, including a loss for the period of **HKD 4.579 billion** and other comprehensive loss of **HKD 607 million** from foreign currency translation differences[70](index=70&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=32&type=section&id=簡明綜合現金流量表) In H1 2022, net cash generated from operating activities was HKD 201 million, net cash used in investing activities was HKD 2.585 billion, and net cash from financing activities was HKD 2.209 billion, resulting in a net decrease of HKD 175 million in cash and cash equivalents. | Activity (HKD Thousand) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **Net Cash from Operating Activities** | 201,045 | 383,560 | | **Net Cash Used in Investing Activities** | (2,585,488) | (4,142,689) | | **Net Cash from Financing Activities** | 2,209,121 | 2,089,291 | | **Net Decrease in Cash and Cash Equivalents** | (175,322) | (1,669,838) | Notes to the Condensed Consolidated Interim Financial Information [Note 1: Organization and Business](index=34&type=section&id=附註1%3A%20組織及業務) This note outlines the group's business structure, detailing the ongoing impact of COVID-19 across Macau, the Philippines, and Cyprus, and discloses the extension of Macau's gaming sub-concession to December 31, 2022, along with related financial guarantees and asset reversion commitments. - The COVID-19 pandemic continued to significantly disrupt the group's business, particularly impacting Macau operations due to travel restrictions, while operations in the Philippines and Cyprus showed recovery[79](index=79&type=chunk)[80](index=80&type=chunk) - The Macau gaming sub-concession contract was extended to **December 31, 2022**, for which the group paid an extension fee of **MOP 47 million** and will provide a bank guarantee of no less than **MOP 820 million**[83](index=83&type=chunk) - The group committed that upon the sub-concession's expiry, the gaming areas, gaming support areas, and gaming equipment of its Macau casinos will revert to the Macau government without compensation[83](index=83&type=chunk) - As of June 30, 2022, the group had a net current liability of **HKD 248 million**, but management believes existing cash and undrawn borrowing facilities will support operations for at least the next twelve months, thus preparing financial statements on a going concern basis[81](index=81&type=chunk)[82](index=82&type=chunk) [Note 3: Segment Information](index=41&type=section&id=附註3%3A%20分類資料) The group's operations are primarily categorized into "Casino and Hotel" and other segments, with Macau remaining the largest revenue source at HKD 4.147 billion despite a significant year-on-year decline, while the Philippines and Cyprus segments showed strong revenue growth. | Net Revenue from External Customers by Geography (HKD Thousand) | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **Macau** | 4,147,205 | 7,296,938 | | **Philippines** | 1,554,431 | 1,026,762 | | **Cyprus** | 295,864 | 77,707 | | **Total** | 6,025,107 | 8,425,275 | | Non-current Segment Assets by Geography (HKD Thousand) | As of June 30, 2022 | | :--- | :--- | | **Macau** | 71,107,635 | | **Cyprus** | 3,400,548 | | **Philippines** | 2,496,058 | | **Total** | 78,338,685 | [Note 9: Loss Per Share Attributable to Owners of the Company](index=49&type=section&id=附註9%3A%20本公司擁有人應佔每股虧損) For the six months ended June 30, 2022, basic and diluted loss per share attributable to owners of the company expanded to HKD 1.58, compared to HKD 1.09 in the prior year, based on a weighted average of approximately 1.504 billion ordinary shares. | Indicator | Six Months Ended June 30 | | :--- | :--- | | | **2022** | **2021** | | **Loss Attributable to Owners of the Company (HKD Thousand)** | (2,374,583) | (1,647,621) | | **Weighted Average Number of Ordinary Shares (Thousand Shares)** | 1,504,474 | 1,514,766 | | **Basic Loss Per Share (HKD)** | (1.58) | (1.09) | [Note 16: Interest-bearing Borrowings](index=55&type=section&id=附註16%3A%20計息借貸) As of June 30, 2022, the group's total interest-bearing borrowings (net of deferred costs) increased to HKD 64.25 billion from HKD 57.88 billion at the end of 2021, driven by the issuance of USD 350 million in senior secured notes and a USD 420 million draw from a revolving credit facility. | Borrowing Type (HKD Thousand) | As of June 30, 2022 | As of December 31, 2021 | | :--- | :--- | :--- | | **Unsecured Notes** | 48,469,327 | 48,151,277 | | **Secured Bank Loans** | 6,665,568 | 6,608,324 | | **Unsecured Bank Loans** | 6,412,953 | 3,117,000 | | **Secured Notes** | 2,701,789 | – | | **Total** | 64,249,637 | 57,876,601 | - In February 2022, the group issued **USD 350 million** aggregate principal amount of **7.00%** Senior Secured Notes due 2027[124](index=124&type=chunk) - During the period, the group drew **USD 420 million** from an unsecured revolving credit facility of **HKD 14.85 billion**[125](index=125&type=chunk) - In March 2022, the company entered into a financing agreement with subsidiary Melco Resorts & Entertainment for a **USD 250 million** revolving loan, of which **USD 200 million** was drawn by period-end[123](index=123&type=chunk) [Note 18: Long Term Incentive Plans](index=58&type=section&id=附註18%3A%20長期獎勵計劃) Both the company and its subsidiary Melco Resorts & Entertainment implemented share option exchange programs during the period, allowing eligible participants to exchange certain underwater options for newly granted options and award shares/restricted shares to better incentivize and retain talent, resulting in incremental share-based compensation expenses. - The company implemented the "Melco Share Option Exchange Program" on April 6, 2022, canceling **33,590,000** eligible share options and granting **453,000** new share options and **11,032,000** new award shares[129](index=129&type=chunk) - Melco Resorts & Entertainment implemented a similar exchange program on April 15, 2022, canceling **26,076,978** eligible share options and granting **2,486,241** new share options and **5,912,547** new restricted shares[130](index=130&type=chunk) [Note 19: Changes in Ownership Interests in Certain Subsidiaries](index=60&type=section&id=附註19%3A%20於若干附屬公司擁有權權益之變動) During the reporting period, the group's ownership interests in key subsidiaries, including Melco Resorts & Entertainment, SCIHL, and the Philippine subsidiary (MRP), experienced minor changes due to share repurchases, private placements, and share award vesting, without altering controlling status. - Due to share repurchases and share award vesting by Melco Resorts & Entertainment, the group's interest in Melco Resorts & Entertainment slightly increased from **57.10%** to **57.26%**[131](index=131&type=chunk) - Following SCIHL's private placement, in which the group participated, its interest in SCIHL slightly increased from **31.41%** to **31.50%**[132](index=132&type=chunk) - The group's interest in MRP increased from **56.52%** to **56.85%** due to the acquisition of MRP shares held by non-controlling interests[133](index=133&type=chunk) [Note 21: Commitments and Contingencies](index=61&type=section&id=附註21%3A%20承擔及或然事項) As of June 30, 2022, the group had capital commitments of approximately HKD 1.927 billion, primarily for property, plant, and equipment acquisition, while the development period for the Studio City Macau land concession was extended to June 30, 2023, and the City of Dreams Mediterranean project in Cyprus experienced construction delays. - Contracted but unprovided capital expenditure for the acquisition of property, plant, and equipment amounted to **HKD 1.927 billion**[135](index=135&type=chunk) - The Macau government further extended the development period for the Studio City land concession development project to **June 30, 2023**[137](index=137&type=chunk) - The City of Dreams Mediterranean project in Cyprus experienced construction delays and is now expected to open in **early Q2 2023**[139](index=139&type=chunk) [Note 24: Events After the Reporting Period](index=64&type=section&id=附註24%3A%20報告期後事項) Subsequent to the reporting period, the group undertook several significant financial actions, including securing an extension for financial covenant waivers on a major credit facility, Melco Resorts & Entertainment repurchasing shares from a company subsidiary, and drawing an additional USD 400 million from its revolving credit facility for general corporate purposes. - In August 2022, the group obtained an extension of the financial covenant waiver for its 2020 credit facility until **March 31, 2024**[148](index=148&type=chunk) - In August 2022, Melco Resorts & Entertainment repurchased approximately **85 million ordinary shares** (including ADSs) from Melco Leisure, a subsidiary of the company[149](index=149&type=chunk) - On August 24, 2022, the group drew an additional **USD 400 million** from its 2020 credit facility for general corporate purposes[149](index=149&type=chunk) Other Information [Directors' and Chief Executive's Interests and Major Shareholders' Interests](index=66&type=section&id=董事及主要股東權益) The report discloses the interests of directors, the chief executive, and major shareholders in the company's shares, related shares, and debentures of the company and its associated corporations (e.g., Melco Resorts & Entertainment, SCIHL) as of June 30, 2022. - Chairman and Chief Executive Officer Mr. Lawrence Ho held a total long position of **886,992,396 shares** in the company as of June 30, 2022, representing approximately **58.48%** of the issued shares[154](index=154&type=chunk) - Mr. Lawrence Ho is deemed to have an interest in **820,091,853 ordinary shares** of its subsidiary Melco Resorts & Entertainment, representing approximately **56.30%** of its issued shares[159](index=159&type=chunk)[160](index=160&type=chunk) - Major shareholder Southeastern Asset Management, Inc., as an investment manager, held **196,518,781 shares** in the company, representing approximately **12.96%**[195](index=195&type=chunk) [Share Option Schemes and Share Award Schemes](index=70&type=section&id=購股權及股份獎勵計劃) The report details changes in the company's and its subsidiary Melco Resorts & Entertainment's share option and share award schemes, including the implementation of option exchange programs and the adoption of a new share option scheme by the company in June 2022. - The company implemented a share option exchange program in April 2022, canceling **33,590,000** old share options and granting **453,000** new share options and **11,032,000** new award shares[166](index=166&type=chunk) - Subsidiary Melco Resorts & Entertainment also implemented a similar program, canceling **26,076,978** old share options and granting **2,486,241** new share options and **5,912,547** new restricted shares[174](index=174&type=chunk) - The company's share option scheme adopted in 2012 expired in May 2022, and a new share option scheme was adopted in June of the same year[166](index=166&type=chunk) [Corporate Governance](index=87&type=section&id=企業管治) The company complied with the Corporate Governance Code during the reporting period, with one deviation: the roles of Chairman and Chief Executive Officer are combined and held by Mr. Lawrence Ho, which the Board believes is in the company's best interest given his deep industry knowledge. - The company complied with the Corporate Governance Code, with one deviation: the roles of Chairman and Chief Executive Officer are not separated, both held by **Mr. Lawrence Ho**[198](index=198&type=chunk) - The Board believes that Mr. Lawrence Ho's combined role as Chairman and Chief Executive Officer, leveraging his deep industry knowledge and business network, is in the company's current best interest[198](index=198&type=chunk) - The Audit Committee reviewed the company's unaudited interim results and interim report for the six months ended June 30, 2022[201](index=201&type=chunk) Company Information [Basic Company Information](index=89&type=section&id=公司基本信息) This section lists the company's essential details, including its Board of Directors, committee members, company secretary, registered office, auditor (Ernst & Young), legal advisors, share registrar (Tricor Standard Limited), and website. - The company's Chairman and Chief Executive Officer is **Mr. Lawrence Ho**[205](index=205&type=chunk) - The company's auditor is **Ernst & Young**[206](index=206&type=chunk) - The company's shares are listed on The Stock Exchange of Hong Kong Limited under stock code **200**[206](index=206&type=chunk)