Friday, March 29, 2024 - Login

MGM China Q1 posts results shy of forecasts, sees stabilization


MGM China posted a steep drop in Q1 earnings and revenue, but joined the growing chorus of Macau operators in saying they see signs of stabilization in the mass market.

MGM China recorded total revenue of HK$3.6 billion, a decrease of 25 percent from a year ago, but narrower than the 31 percent year-on-year decline in the prior quarter.

Adjusted EBITDA was HK$995 million ($128 million), down 23 percent from a year ago. The company said its business was negatively affected by low hold in both mass table games and in-house VIP operations.

Wells Fargo said revenue and EBITDA were about 8-9 percent below the consensus forecast.

“We are monitoring the market and are encouraged by the trends in the mass space. Macau mass GGR has shown improvement for three consecutive quarters now, and we are seeing signs of stabilization,” the company said in its earnings release.

MGM said construction of its MGM Cotai resort is progressing and it expects all major building work to be completed by the end of this year.

“With the expansion of room base, we intend to continue targeting quality customers who spend longer periods of time at our property. We remain focused on bringing a world class offering to the market in the first quarter of 2017,” MGM China CEO Grant Bowie said.

Group-wide Q1 earnings fell, but handily topped expectations with domestic U.S. operations outweighing weakness from Macau.

Diluted earnings per share for the first quarter of 2016 was $0.12, compared to diluted earnings per share of $0.33 in the prior year quarter, with profit hit by the impact of tax changes.

Casino revenue related to wholly owned domestic resorts increased 4 percent, excluding the operations sold during 2015.

“Broadly, we find the results very encouraging and indicative of a continued cost focus, promoted by further solid underlying Vegas Strip trends,” Deutsche Bank said in a note.

The bank said wholly-owned property level EBITDA of $485 million beat its $440 million estimate.

 



 

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

Contact us

ASIA GAMING BRIEF
PO Box 1139, Macau SAR
Tel: +853 2871 7267
Fax: +853 2871 7264

Asia Gaming Brief