MGM Resorts International has again modified its language on the opening date for its majority-owned casino resort [pictured in a rendering] on Cotai in Macau.
“The construction of MGM Cotai is progressing well and is on time, and on budget, for a fall 2016 opening,” Jim Murren, chairman and chief executive of MGM Resorts, 51 percent owner of MGM China Holdings Ltd, said in a statement accompanying the parent’s third quarter earnings.
Net revenue for MGM China fell 2 percent year-on-year in the third quarter of 2014, to US$794 million, MGM Resorts said in a filing on Thursday.
MGM China has spent US$81 million on the development of MGM Cotai in the three months to September 30.
“We are just refining the plans, we’re very comfortable working with the contractor that we now got,” Grant Bowie, chief executive of MGM China, said on a conference call with analysts following the release of the results. He was commenting the changes in language on MGM Cotai’s opening date.
“Still some challenges as to licensing, but even that process we are starting to get more comfort in understanding how that process is going to work. So that’s really what it is. We’re just trying to provide a little more guidance,” he added.
MGM China had said in its first half results in August that the opening of the US$2.9 billion MGM Cotai would likely be “in 2016” rather than “early 2016” as stated previously.
Deutsche Bank AG analyst Karen Tang mentioned “permit backlog” as an issue for under-construction Cotai resorts in a note last month. That was a reference about the pace at which the Macau government can issue necessary permissions for different stages of building work.
“For MGM Cotai we already have shifted the opening assumption in our model from early 2016 to late 2016,” Ms Tang said.
The main superstructure of MGM Cotai is now three floors above ground. Analysts at UBS AG are assuming a “third quarter 2016 opening” for the property.
(Updated at 8.53am, October 31)
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Amount that each Macau casino operator paid for the circa six-month extension of their respective contract