MGM pulls out of downturn with record earnings at CityCenter
Boosted by an all-time earnings record at its CityCenter development and its best-ever first quarter in Macau, MGM Resorts International shifted from the red to black for the quarter that ended March 31.
The Las Vegas-based company today reported net income of $22.6 million, 1 cent a share, on revenue of $2.54 billion. That compared to a first-quarter loss of $203.3 million, 44 cents a share, on revenue of $2.47 billion for the same quarter a year earlier.
“Our first quarter 2013 results are the best we have reported since the beginning of the downturn five years ago, led by improved results at our Las Vegas Strip resorts,” MGM Resorts Chairman and CEO Jim Murren said in a statement issued with earnings results today.
The Las Vegas numbers were topped by CityCenter’s results.
Cash flow at the property that opened in late 2009 was $93 million, nearly three times the $32 million reported in the prior-year quarter. Net revenue was up 32 percent to $315.1 million at Aria, Vdara, Crystals, the Mandarin Oriental and the development’s residential units.
Occupancy rates climbed more than 2 percentage points to 89 percent at Aria and more than 4 percentage points to 85.7 percent at Vdara.
Macau, the cash cow that has boosted the fortunes of Wynn Resorts and Las Vegas Sands this quarter, also boosted the company.
MGM China, the partnership involved in the company’s Macau operation, earned net revenue of $748 million, up 6 percent from the first quarter of 2012, and table games and slot win increased 26 percent and 19 percent, respectively.
In a conference call this morning, company executives said they were optimistic about Las Vegas’ future but still wary of the unpredictability of the economy.
“Las Vegas is nicely recovering and performance will outstrip our regional division for the foreseeable future,” Murren said.
He noted that the company’s new Hakkasan nightclub at the MGM Grand has opened to rave reviews and the company is looking forward to two big weekends — Saturday’s Floyd Mayweather-Ruben Guerrero boxing match and next week’s Rolling Stones concert at the MGM Grand.
Concert dates are on the horizon at MGM properties for Beyonce and Justin Bieber.
Murren said a nightclub and a day club will open soon at Mandalay Bay and Cirque du Soleil’s “One” show themed around the music of Michael Jackson begins shows later this month.
MGM officials also announced a $100 million park with retail amenities to be built between Monte Carlo and New York-New York. SBE Double Barrel Road House, Shake Shack and Hershey’s will be among the first tenants of the development. The park will be an entryway to a 20,000-seat arena the company is building in a partnership with AEG. Murren said the arena, expected to be completed by 2016, would drive additional large events to Las Vegas.
“It’s the beginning of a new era for MGM,” Murren said.
The company continues to be active outside Las Vegas. While Southern Nevada and Macau propped up weaker results from MGM’s other regional properties, executives noted that MGM Detroit and the Beau Rivage in Biloxi, Miss., are market leaders in those markets.
MGM continues to bid to build resorts in Massachusetts, Maryland and Toronto, and ground has been broken on a new MGM property on Macau’s Cotai Strip, expected to open in the first half of 2016.
While the company’s finances are improving and executives say they are optimistic that air passenger capacity will grow this summer, they say the recovery is still fragile.
“This economy is hard to predict and it tempers our enthusiasm somewhat,” Murren said. “The scars of the recession have not fully healed.”