Jul 31, 2020 Newsdesk Latest News, Macau, Top of the deck, World  
Macau casino operator MGM China Holdings Ltd said its second-quarter net revenues fell 95.3 percent year-on-year amid the Covid-19 pandemic, while adjusted property earnings before interest, taxation, depreciation and rent or restructuring (EBITDAR) fell into negative territory.
Net revenues were down to just under US$33.2 million, compared to slightly below US$706.1 million in the prior-year quarter. Adjusted property EBITDAR was negative by US$116.3 million, compared to a positive number of US$172.8 million in the second quarter of 2019.
The numbers were quoted in a Hong Kong filing by MGM China, citing its parent, United States-based casino operator MGM Resorts International. As of the date of the results announcement, MGM Resorts beneficially owned approximately 56 percent of the issued share capital of MGM China.
The parent said separately in an earnings presentation, that the second-quarter Macau result was against a background of Macau-market gross gaming revenue (GGR) “declining 96 percent and visitation down nearly 100 percent,” driven by “border and travel restrictions”.
The firm runs two casino resorts in Macau: MGM Macau on the city’s peninsula, and MGM Cotai, in Macau’s Cotai district.
Total quarterly revenue at MGM Macau fell 95.4 percent, to HKD139.9 million (US$18 million), from nearly HKD3.06 billion in the prior-year quarter. Such revenue at MGM Cotai slipped 95.3 percent year-on-year, to HKD117.5 million, from nearly HKD2.48 billion.
Nonetheless, Hubert Wang, recently appointed as president and chief operating officer of MGM China, gave some upbeat commentary on some recently-announced easing of quarantine rules for movement by travellers setting off from Macau and going to the neighbouring mainland province of Guangdong.
He said in a press release issued by the Macau unit : “We are encouraged to see the lifting of quarantine measures for visitors from Macau into Guangdong province, as an important first step of business normalisation.”
Mr Wang added: “While we focus to contain our costs, we are rolling out programmes to drive traffic and prepare for gradual recovery.”
As of June 30, MGM China had total liquidity of HKD11.4 billion, consisting of “cash and cash equivalent and undrawn revolver,” the Macau unit said in its own filing to the Hong Kong Stock Exchange.
The parent MGM Resorts noted in its earnings presentation that the removal from July 15, of a 14-day quarantine rule for many travellers regarding their movement from Macau to Guangdong – although they still need to show a test certificate proving they are free from Covid-19 – was a “first step” for Macau market rebound. There was some modest further easing announced on Tuesday.
But MGM China’s parent added that “meaningful recovery will require the resumption of Individual Visit Scheme (IVS) and tour visa programmes”. That was a reference to two forms of exit visa for mainland China residents, considered important for the Macau tourism market.
MGM Resorts – which reopened its Las Vegas, Nevada casino operations in June but is still being affected by the Covid-19 disruption – said its group-wide second-quarter net loss was US$857.3 million, compared to net income of US$43.4 million in the prior-year quarter.
The diluted loss per share for MGM Resorts was US$1.67 in the current reporting quarter compared to diluted earnings per share of US$0.08 in the prior year quarter.
MGM Resorts’ consolidated adjusted EBITDAR loss for the three months to June 30 was US$492.2 million, compared to a positive figure of US$764.3 million in the prior year quarter.
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