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China – MGM China falls 63 per cent in first quarter

By - 4 May 2020

The COVID-19 casino closures in Macau forced a 63 per cent dip in revenues on operator MGM China Holdings with the company’s MGM Cotai and MGM Macau reporting net revenues of US$272m for the three months to March 31 2020.

In the first quarter, MGM China saw an adjusted negative EBITDA of HK$0.1bn with overall occupancy rate at 36 per cent. The first-quarter results were significantly impacted by the COVID-19 pandemic and we continue to be impacted today. China has implemented temporary suspension of tour groups and Individual Visit Scheme in late January, followed by a 15-day shutdown of all casinos (February 5 to 19) by the Macau Government. The Macau market continues to experience low visitation levels primarily driven by various travel restrictions and quarantine measures in Mainland China and Hong Kong. Macau’s gross gaming revenue (GGR) in first quarter declined by 60% year-on-year, that February GGR was down by 88% year-on-year and March down by 80 per cent year-on-year.

For the Period, MGM Macau recorded revenue of HK$1.1bn and EBITDA of HK$34.1m. MGM Cotai recorded revenue of HK$1bn and negative EBITDA of HK$156.8m. They were reopened on February 20 with social distancing and other safety protocols in place.

Grant Bowie, Chief Executive Officer and Executive Director of MGM China said: “The decisive actions and leadership of the Macau Government has contained the COVID-19 & shielded Macau from the worst effects. We at MGM China have been working with the Government as we focus on the health and safety of our team members, guests and all Macau citizens. While we focus to contain our costs, we are building scenario and maintaining relationship with our customers. We are preparing for recovery and extremely positive about the prospects of Macau gaming and hospitality market in a longer term.”

“The year started strong with results ahead of expectations, however the COVID-19 pandemic resulted in the closure of our properties which had a material negative impact on our first quarter results,” added Bill Hornbuckle, Acting CEO and President of MGM Resorts. “We are aggressively managing our cash outflows and strengthening our liquidity position to make certain that despite a lack of revenue, we are able to advance our longer term strategic initiatives such as a new integrated resort in Japan, growing our business in Macau, and establishing a leading presence in sports betting and online gaming (in the United States). With premier assets in most of the markets in which we operate, we are confident we will emerge from the crisis in a strong position.”

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