MGM Resorts International has beaten first quarter expectations, as the company re-emphasised its global targets moving forward, including a number of property enhancement, implementation of its 2020 initiative and growth opportunities within the prospective integrated resorts scene in Japan.
Net revenues for the group during 2019’s first quarter came in at $3.2bn, a 13 per cent boost from £2.8bn, operating income jumped three per cent to £370m (2018: 359m) and adjusted EBITDA increased five per cent to $740m (2018: $701m).
Breaking down the figures further, MGM saw its Las Vegas strip resorts remain consistent at $1.4bn, with its wider regional properties increasing 21 per cent to $804m (2018: $666m), including $78m in contributions from the opening of MGM Springfield on August 24, 2018, and $37m in contributions from the acquisition of Empire City Casino earlier this year.
Furthermore MGM China’s $734m in revenue represents a 25 per cent increase from $595m, incorporating a full quarter of operations following the opening of MGM Cotai, as well as the addition of 25 new-to-market tables at the turn of the year, which provided a combined $301m.
Jim Murren, chairman and CEO of MGM, said of the first quarter performance: “The first quarter came in slightly better than our expectations, with consolidated net revenues up by 13 per cent and adjusted EBITDA up 5 per cent.
“Our Las Vegas resorts experienced broad and diversified customer demand. Our non-gaming revenues grew by 4 per cent. We had healthy gaming business outside of baccarat, but previously flagged factors such as a very strong baccarat business in the prior year period, and a low win rate in the current period, led to flat revenues and a 10 per cent decrease in adjusted property EBITDA year over year.
“Our regional properties performed exceptionally well with 24 per cent growth in adjusted property EBITDA, or 9 per cent on a same store basis. MGM Grand Detroit, MGM National Harbor and our Mississippi properties had strong quarters.
“MGM Cotai continued to ramp and contributed to the 26 per cent growth in adjusted property EBITDA at MGM China. During the quarter, we were very pleased to receive the extension to our Macau sub-concession to June 2022. We remain deeply committed to Macau’s continued evolution into an international leisure and tourism destination.”
Before adding on the plans and ambitions for future weeks and months: “We remain focused on achieving our 2020 targets of $3.6bn to $3.9bn in consolidated adjusted EBITDA, and significant growth in free cash flow.
“Our strategy to achieve these goals includes the continued ramping up of MGM Cotai, Park MGM and MGM Springfield, and the implementation of the MGM 2020 Plan. MGM 2020 is a company-wide initiative aimed at leveraging a more centralised organisation, to maximise profitability and lay the groundwork for the company’s digital transformation to drive revenue growth.
“We are creating a streamlined, nimble organisation that empowers leaders to make faster decisions. We are excited about our targeted growth opportunities in Japan, sports betting and interactive initiatives. At the same time, we are maintaining a disciplined approach to capital allocation, and creating long term value for shareholders.”