Supplier News
US – Nevada properties prop up MGM’s second quarter
By Phil - 10 August 2015
Las Vegas is once again driving revenue at MGM resorts with Nevada resorts helping the group stem revenue loss from the downturn in Macau.
GGR for the second quarter came in at $98m, down 11 per cent from the $110m it recorded last year.
Jim Murren, Chairman and Chief Executive, said of the Las Vegas properties: “We are continuing to drive increased profits at MGM Resorts with second quarter wholly owned Adjusted Property EBITDA up 11 per cent driven by growth at our Las Vegas and regional resorts. These resorts are continuing to gain operating momentum while we continue to make significant progress on our development pipeline in Cotai, Maryland, and Massachusetts. We are focused on positioning the Company for future growth, and are pleased to announce the implementation of our Profit Growth Plan to further enhance our business practices and profitability.”
CityCenter’s Adjusted EBITDA related to resort operations was $84m, a four per cent increase compared to the prior year quarter. Net revenue from resort operations increased by three per cent to $312m compared to $304m in the prior year quarter.
Net revenue at the company’s wholly owned domestic resorts was $1.7bn, an increase of four per cent compared to the prior year quarter. This offset the continuing disappointment in Macau where MGM China’s net revenue came in at $557m and Adjusted EBITDA was $132m, decreases of 33 per cent and 37 per cent, respectively, compared to the prior year quarter.
The company has announced the Profit Growth Plan today for sustained growth and margin enhancement. The Profit Growth Plan includes a significant number of opportunities to enhance our business operations. The plan is expected to result in $300mof annualised Adjusted EBITDA benefit. The Profit Growth Plan commenced in July 2015 and it is expected to begin to show results as early as the second half of 2015 and be fully realized by the end of 2017.”The Profit Growth Plan represents a further advancement in how we conduct business at MGM Resorts, with greater focus on streamlining business process, leveraging our size and scale to reduce costs and drive market share, and innovations in customer service. This plan will redefine the way we operate in critical areas and position MGM Resorts for future growth, for the benefit of our Company as a whole and our shareholders.”
Dan D’Arrigo, Executive Vice President, CFO and Treasurer of MGM Resorts International, added; “We continue to focus on improving MGM Resorts’ balance sheet, having reduced total debt by $2.3bn since the beginning of the year, including the repayment of the $875 million senior notes that matured in July. During the second quarter, MGM China strengthened its financial flexibility by increasing its senior credit facility from $2bn to $3bn. This facility, along with MGM China’s free cash flow, has allowed it to continue to invest in its existing operations as well as future growth opportunities, while at the same time returning value to its shareholders.”
