MGM China 2Q net revenues exceed pre-pandemic 2Q 2019

Aug 03, 2023 Newsdesk Latest News, Macau, Top of the deck  

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Quarterly net revenues at Macau casino operator MGM China Holdings Ltd exceeded by 4.9 percent those of the pre-pandemic second quarter in 2019, said a Thursday filing from the firm, citing the second-quarter results of its parent MGM Resorts International, issued on Wednesday.

MGM China net revenues for the three months to June 30 were US$741.0 million, compared to US$706.1 million in second-quarter 2019.

Judged quarter-on-quarter, the net revenues for the period to June-end rose 20.0 percent, and were up 418.1 percent on second-quarter 2022, the latter a period when Covid-19 travel restrictions were still in place.

MGM China’s second-quarter adjusted property earnings before interest, taxation, depreciation, amortisation (EBITDA) were HKD1.75 billion (US$223.9 million), up 19.8 percent on the HKD1.46 billion in second-quarter 2019.

Judged quarter-on-quarter, adjusted property EBITDA for the quarter to June-end this year, rose 24.1 percent from the first-quarter’s HKD1.41 billion.

“Management said the trend improved even further in July with all its key performance indicators, such as recovery rates in daily GGR [gross gaming revenue], mass GGR, and even EBITDA, ramping up further from second-quarter 2023,” said a Thursday note from JP Morgan Securities (Asia Pacific) Ltd.

“Granted, this is in part due to the market-wide recovery… but the management sounded very confident on its market share trends as well,” added analysts DS Kim and Mufan Shi.

In a filing to the Hong Kong Stock Exchange, MGM China said the current reporting quarter “was positively affected by the removal of Covid-19 related travel and entry restrictions and an increase” in visitor volume.

MGM China runs the MGM Macau resort on the city’s peninsula, and MGM Cotai in the newer gaming-resort district of Cotai.

Mass drop, VIP turnover

Profit attributable to MGM China’s owners was HKD669.63 million, compared to a loss of HKD1.37 billion in the prior-year quarter.

Second-quarter 2023 profit was up 342.6 percent on the HKD151.28 million achieved in the first quarter this year.

The MGM Macau property’s revenue for second-quarter 2023 was HKD2.58 billion, up 10.1 percent on the HKD2.34 billion in the first quarter.

Main-floor table games drop at MGM Macau was HKD11.73 billion, up 26.2 percent sequentially on first-quarter’s HKD9.29 billion.

VIP table games turnover was HKD8.46 billion, up 13.8 percent on the first quarter’s HKD7.43 billion.

The MGM Cotai resort’s second-quarter revenue was HKD3.23 billion, a rise of 29.3 percent on first quarter’s HKD2.50 billion.

Main-floor table games drop at MGM Cotai was HKD10.79 billion, up 38.8 percent sequentially on first-quarter’s HKD7.78 billion.

VIP table games turnover was HKD23.99 billion, up 112.9 percent on the first quarter’s HKD11.27 billion.

The firm said in a separate press release: “We grew our market share to 14.9 percent for the period, from 9.5 percent in 2019. MGM Macau market share was 6.9 percent and MGM Cotai market share was 8.0 percent.” In the Macau context, “market share” usually refers to percentage of total market GGR.

In first-quarter 2023, the firm had said its market share was 15.4 percent, described at the time as an “historical high“.

The press release added that MGM China “maintained a healthy financial position”. It said as of June 30, it had total liquidity of approximately HKD16.7 billion, comprised of cash and cash equivalents and undrawn revolver.

On a conference call with investment analysts on Wednesday, the management said MGM China was set to deploy in the third quarter more gaming tables at its properties, and expand its sales and marketing teams, in a bid to drive more international customers to its venues.

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