Revenue for casino operator MGM China Holdings Ltd fell by 1 percent in year-on-year terms to US$828 million in the second quarter of 2014, as VIP play in Macau lost steam in the period.
VIP table games revenue at MGM China’s only casino dropped by 18 percent “due to a decrease in VIP table games turnover of 10 percent compared to the prior year quarter and lower hold percentage of 2.7 percent in the current year quarter compared to 2.9 percent in the prior year quarter,” according to a statement on Tuesday from MGM Resorts International, the company’s Las Vegas-based parent.
Market-wide revenue from Macau’s VIP segment fell by 5.8 percent year-on-year in the second quarter, according to official data.
MGM China’s results were helped by the growth in the mass-market segment. Main floor table games revenue increased 41 percent year-on-year in the three months to June 30, the company said.
That was above the market-wide average for the period. Revenue from mass-market baccarat in Macau increased by 35.3 percent year-on-year in the April to June period.
Group wide, net revenue for the second quarter of 2014 was US$2.6 billion, a rise of 4 percent year-on-year.
The firm said the growth was fueled by a 6 percent increase year-on-year in casino revenue at MGM Resorts’ wholly owned properties in the U.S.
Net income reached US$105.5 million, or US$0.21 a share, compared with a loss of US$93 million, or US$0.19, a year earlier, the Las Vegas-based company said. Analysts polled by Thomson Reuters expected US$0.10 for the period.
MGM Resorts joins rival operator Wynn Resorts Ltd in reporting an increase in gambling in Las Vegas in the three months to June 30.
“I am pleased to report another solid quarter of growth at MGM Resorts,” Jim Murren, the company’s chief executive, said in the statement. “Our domestic business was very strong with 12 percent EBITDA [earnings before interest, taxation, depreciation and amortisation] growth in Las Vegas driven by strong performance in both our room and casino segments. CityCenter resort operations continue to improve while in Macau we grew cash flow and margins due to a higher contribution of revenues from our main floor business,” he added.
MGM China’s adjusted EBITDA in the second quarter of 2014 rose to US$210 million, up 3 percent from a year earlier.
Also on Tuesday, MGM China’s board announced a dividend of US$136 million, which will be distributed on September 1.
For the first six months of 2014, MGM China’s revenue increased by 11.8 percent year-on-year to HKD13.7 billion (US$1.8 billion), the company said in a separate filing to the Hong Kong Stock Exchange on Tuesday. Profit for the period rose by 22.7 percent to HKD3 billion, it added.
“Our operating results were positively impacted by our operating strategy and the market growth, but at the same time inhibited by competition, and general economic condition and political issues particularly in China,” the casino operator said.
The company also said that the US$2.9 billion MGM Cotai “is well underway” and on track for the opening in 2016.
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