Ricardo Chinchilla: I was wondering if you guys could please comment on, based on what you saw during the Chinese New Year period, is there a migration from VIP business into direct and premium mass component of your business? And any experience that you guys have seen with whatever VIP junket there is in the market today. That color would be very helpful.
Lawrence Ho Yau Lung: Thanks for the question. Maybe I’ll hand it off to David. But I think for Melco, we have the — even during the pre-pandemic junket days, we were always the undisputed market leader in terms of premium direct VIP business. And we have continued that leadership during Chinese New Year and quarter to date. What we have seen and this is in line with what we have seen over the years, is the junket business, if anything, they kind of dovetail into the premium direct business. So what we have seen is some junket play that moved to our premium direct program. I think less so on junket to premium mass but maybe David can add more color.
David Sisk: We made a concerted effort a few years ago back in 2019 to really start trying to move some of that junket business, some of those bigger players to our premium direct business. And the team has worked really hard on that. And I think that’s kind of paid dividends for us as we’ve come into a recovery paid down in 2023. Additionally, we’ve seen a lot of our premium direct play now return not only from Hong Kong but also Southeast Asia and that continues even up to tonight. And as we’ve seen that not only do we see that Chinese New Year during the January period but we saw that throughout February and we’re seeing that in March as well there already. So again, that play coming through from the junket doesn’t seem to have impacted us quite as much because of the efforts that we had back a few years ago in terms of really trying to migrate more of that play over to premium direct.
So we think that, again, is a good story for us and that will continue and we’ll be able to maintain our market leadership position in premium direct play.
Ricardo Chinchilla: Perfect. That’s great color. I was wondering if you could comment on your capital expenditures in both the restricted group and outside of the restricted group for the remaining of the year and maybe into 2024, given the commitment that you might have realized with the Chinese authorities — with the Macanese authorities for the concession renewal discussion.
Lawrence Ho Yau Lung: Geoff, do you want to take that?
Geoffrey Davis: Sure. So the spend in Cyprus is expected to be, in 2023, approximately USD 60 million to USD 65 million. For the remainder of Studio City Phase 2, we estimate that to be $75 million to $80 million. And we’ve got maintenance on top of that of $150 million to $160 million.
Operator: The next question from Praveen Choudhary from Morgan Stanley.
Praveen Choudhary: Geoff, quick question. I’m very focused on the mass business. Just wanted to understand if I look in future, you are adding a lot of rooms in the Studio City Phase 2 but then you’ve lost a few tables with the new concession. For example, some of the other competitors have gained some tables. So just to this interplay of rooms versus tables, in your case, more rooms but less table, how does it play in your new market share versus pre-COVID level?
Lawrence Ho Yau Lung: Praveen, this is Lawrence. So we got exactly the number of tables that we requested according to our investment proposal. So within — in our minds, we didn’t lose tables. And at the end of the day, pre — before the new concession, we had 900 tables but 300 to 400 of those tables were given to junkets. And given that the junket market is no longer there, we didn’t feel necessary to have all those tables. And at the end of the day, between City of Dreams, Studio City and Altera, it would be really hard to jam-pack like 900 mass tables on the floor. So I think we have a good model right now. And I think with Studio City Phase 2 opening, if anything, it’s going to completely relaunch that property. If anything, we’ve always felt that Studio City was underappreciated.
So now with the new positioning, with the new indoor water park and we’ve, over the last few years, even during COVID, we redid a lot of the retail to reposition the property to be even more mass-focused. I think we feel very good about the number of tables we have there and the number of rooms we have there.
Praveen Choudhary: Very helpful. The other question was related to the liquidity condition for the company. I know now we are running EBITDA-positive and soon will be free cash flow-positive. Is it fair to assume that there should not be any reason to believe any kind of equity offering or any such thing to delever in the near term?
Lawrence Ho Yau Lung: Praveen, I think our number 1 focus, of course, one of the first questions today was what was the biggest regret during COVID, the 3 years of COVID. And I think the regret was we had to — in order to continue to support all of our staff and we didn’t let go of any locals and we took on a lot of debt. So I think the number 1 objective of the company for the next 2, 3 years is really to delever and pay down debt. I think there’s no — I think given the trajectory of the business right now and the continuous growth that we expect to see, I don’t see an equity offering on the way. But at the same time, as a company, we always keep all of our options open.
Praveen Choudhary: Yes. Yes. No, that’s very helpful. If I could just end with the last question which I think some of other peers have also asked. The February, you said, mass business, was similar to January. Is it possible to suggest that we were running at 60%, 70% of 2019 level in February? I’m talking about mass business, obviously. Have you given that number? I may have missed it. And that’s my last question.
David Sisk: Praveen, it’s David. Said that we’re about 70% of where we were back in the fourth quarter of 2019. As I said, it gets a little softer on midweek but it goes up nicely on the weekends here and we continue to see it rise. So like I said, we’re very optimistic as we head into the future here.
Praveen Choudhary: Excellent. Sorry, I may have missed that. Did — and again, congratulations; things are improving. I hope the good times roll in for all of us.
Operator: There are no further questions at the moment. I would hand back the conference to Ms. Jeanny Kim for closing remarks. Please go ahead, ma’am.
Jeanny Kim: Thank you, operator and thank you, everyone, for participating in our call today. We look forward to speaking to you next quarter. Thank you.
Operator: This concludes the conference for today. Thank you for participating. You may all disconnect.
