Operator News
US – MGM’s third quarter ‘exceeds expectations’
By Phil - 31 October 2018
Despite table gaming being down at its Strip properties, MGM Resorts said its third quarter performance ‘exceeded expectations’ with net revenues hitting the $3bn mark, increasing seven per cent compared to the prior year quarter to $3bn.
The picture wasn’t completely rosy though with net revenues decreasing two per cent domestically to $2.2bn.
“Our third quarter operating performance exceeded our expectations despite the tough year on year comparison, resulting from robust casino business and an exceptionally strong event calendar last year.” said Jim Murren, Chairman and CEO of MGM Resorts International. “During the quarter, we successfully opened MGM Springfield, which has been well received by our customers. Earlier this month, we also officially opened the NoMad Hotel at Park MGM, which will help expand our customer reach. We remain highly focused on our strategic priorities, including maximizing the performance of our portfolio of premier properties, driving growth in free cash flow and delivering on our capital allocation strategy.”
Mr. Murren added: “Stabilising market conditions are positioning MGM Resorts for improvement in the fourth quarter. Looking further out, our growth will be driven by the continued ramp of our newly opened properties along with our disciplined approach to improve our margins throughout our resort portfolio. We also are executing on additional targeted growth opportunities in key areas including sports betting and Japan’s upcoming Integrated Resort market. Our focus on balance sheet strength will help ensure prudent capital allocation and the continued return of capital to shareholders. Overall, we remain confident that we will deliver on our 2020 goals.”
Operating income at the company’s domestic resorts was $435m for the third quarter of 2018 and was impacted by $31min preopening expenses at MGM Springfield, disruption related to the repositioning and rebranding at Park MGM.
Casino revenue for the third quarter of 2018 increased one per cent compared to the prior year quarter, due primarily to the opening of MGM Springfield. Table games win decreased 15 per cent at the company’s Las Vegas Strip resorts
Mr. Murren said: “We expect to deliver positive results in the fourth quarter at our Las Vegas Strip resorts with net revenues up slightly and Las Vegas Strip REVPAR up one to two percent. We also expect Las Vegas Strip Adjusted Property EBITDA margins to be flat to up slightly. These projected results are in line with our previously stated full year guidance. Heading into 2019, the completion of Park MGM and NoMad, the expanded MGM Grand convention space, and a better backdrop in group business position us well in Las Vegas. We will also benefit from a full year of operations at MGM Springfield.”
