MGM sitting pretty domestically but Asian growth stagnates

MGM sitting pretty domestically but Asian growth stagnates

Friday, November 10, 2017 Posted by Michael Lawson
The company has paid back over $500 million to shareholders this year

Global entertainment and hospitality giant MGM Resorts International has announced a net revenue increase of 18% on its domestic resorts compared to Q3 2016. The figure rose to $2.2 million (£1.68 million), as the Las Vegas-based casino enterprise recorded generally positive Q3 results, aided by the acquisition of the Borgata chain but hindered by a decline in its MGM China brand.

On a domestic level, MGM recorded an operating income of $546 million, an 82% increase from Q3 2016. The aforementioned acquisition of the Borgata Hotel Casino and Spa - carried out in August 2016 - also had a positive effect on domestic figures, with a 32% rise in casino revenue being attributed largely to this purchase.

Not so promising for MGM was the decline in Asian market growth, with the MGM China brand declaring an operating income of $35 million (£26 million) compared to $84 million (£63 million) in the prior year quarter. Nevertheless, MGM China did have a small increase in net revenue compared to Q2 2017 - up 5% from $449 million (£341 million).

The overall outlook for MGM is positive, and it has returned over $500 million (£380 million) to shareholders in the form of dividends and share repurchases over the past twelve months.

Jim Murren, Chairman & CEO of MGM Resorts, said: "We delivered excellent third quarter results across all key metrics, resulting in diluted earnings per share of $0.26 and double-digit growth in net revenues and Adjusted EBITDA — a strong affirmation of the strategies we have implemented to drive profitability and increase operational efficiency.

"We continue to stimulate increased demand by leveraging our unique portfolio of offerings, including sports and entertainment events and a strong convention business, while maximizing profits throughout the entire enterprise. Our strong business model and prominent position in key markets give us confidence in our long-term fundamentals and ability to continue driving shareholder value."

"We again wish to thank our employees and first responders – including the men and women who acted heroically – for their incredible acts of compassion and courage during the tragic and senseless events of October 1st, a date we will not forget.”

Totally Gaming says: Overall, the recorded Q3 2017 results for MGM Resorts International must be viewed as positive, despite the lack of decent growth in Asia. The acquisition of the Borgata enterprise has given the company’s domestic figures a welcome boost, and this has largely made up for MGM China’s shortcomings. Furthermore, MGM China did record revenue increases from Q2 2017, so the decline from the last year’s Q3 shouldn’t be dwelled on too much.

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