MGM enjoys home comforts despite another mauling in Macau

MGM enjoys home comforts despite another mauling in Macau

Thursday, May 5, 2016 Totally Gaming
CEO Jim Murren focused on growth in the US

MGM Resorts beat analysts’ expectations with its Q1 trading update, but still saw profits decline by 61 per cent due to continuing problems in Macau.

The casino operator, which has seen its share price fall by five per cent this year, said its profit for the first three months of the year was $66.8m (€58.7m), compared to $169.9m during the same period in 2015.

Revenue was down by five per cent to $2.2bn, but earnings per share of $0.12 were an improvement on the $0.11 predicted by sceptical analysts ahead of the results.

While MGM’s net revenues in the US were up by 2.5 per cent to $1.7bn, the company endured another torrid quarter in Macau, where the industry has continued to decline, with a 26 per cent drop to $469m. Adjusted earnings were also up in the US, but fell by 23 per cent to $114m in China.

The latest period also included a tax provision of $21.3m, while the year-earlier period included a tax benefit of $56.3m.

Despite the fall in revenues and profits, Jim Murren, chairman and chief executive of MGM, focused on the positives.

"MGM Resorts delivered an exceptional quarter, generating strong financial results while completing significant strategic achievements," Murren said. “Our wholly-owned domestic resorts reported the strongest adjusted property EBITDA since 2007, as well as an impressive 524 basis point increase in adjusted property EBITDA margins, demonstrating the strength of our operations and success of our Profit Growth Plan.”

TotallyGaming.com says: “Macau continues to hinder operators’ balance sheets, but indications that the decline of the Chinese province may have plateaued and MGM’s strong performance in the US, will be the cause of optimism for the future.”

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