The board of Macau-based casino operator MGM China Holdings Ltd has proposed the payment of a final dividend for the year 2024 of HKD0.251 (US$0.032) per share.
The Hong Kong-listed company said in a filing on Thursday that it expected to spend HKD953.8 million on the dividend. The firm added that the amount represented “approximately 20.7 percent of the group’s profit for the full year 2024.”
In that year, MGM China’s adjusted earnings before interest, taxation, depreciation, and amortisation rose by 25.2 percent year-on-year to nearly HKD9.06 billion. That was on aggregate revenue that grew by 27.2 percent from 2023, to just under HKD31.39 billion.
The firm posted a 2024 profit of HKD4.60 billion, a jump of 74.5 percent compared to 2023.
The company anticipates the final dividend will be paid on or about June 12, to shareholders whose names appear on the register of members on June 3.
The dividend payment remains subject to shareholders’ approval.
“The board has resolved to recommend the payment of the final dividend after consideration of the group’s latest general financial position, existing cash flow, capital requirements going forward and other factors that the board considered relevant,” the firm said.
MGM China is controlled by U.S.-based casino operator MGM Resorts International. The firm operates two properties in the Macau market: MGM Macau (pictured) on the city’s peninsula and MGM Cotai in the Cotai district.
MGM China declared a special dividend last August, spending just over HKD1.34 billion on it. The casino firm resumed payment of dividends in March last year, following a period in which its business – as well as those of its five competitors in the Macau market – was negatively affected by the Covid-19 pandemic.
Brokerage JP Morgan Securities (Asia Pacific) Ltd said in a note commenting on MGM China’s announcement that the 2024 final dividend, coupled with the firm’s special interim dividend announced in August, implied a 50-percent payout ratio.
“Its 5-percent-plus per annum yield does stand out from its peers, and it’s pretty attractive for medium-term shareholders, in our view,” wrote analysts DS Kim and Selina Li.
They noted that MGM China had also updated its official dividend policy to “a regular dividend of up to 50-percent payout, plus special dividends if any”. That, according to JP Morgan, represented “a modest step-up” from the previous policy of “a regular dividend of up to 35-percent payout, plus special dividends if any”, in place since 2013.
“We do not believe this will necessarily alter its implicit commitment to ‘at least a 50-percent payout’; however, the change in official policy indicates management growing confidence in its free cash flows, which we view as marginally positive,” the brokerage added.
(Updated at 8.50am, Mar 21)
