MGM results improve on Las Vegas Strip spending, China growth
22 February 2012
MGM Resorts International on Wednesday said net revenue improved across the board for its Las Vegas casino resorts in the fourth quarter, helping the company narrow its loss for the period.
Bellagio, for instance, posted quarterly net revenue of $308.8 million, up from $269.3 million in the year-ago quarter as the average daily room rate there improved from $209 to $242.
The MGM Grand similarly saw its average daily rate grow from $117 to $136, an indication of higher demand as tourists return to the Las Vegas Strip and spend more as the local tourism industry rebounds from the recession.
Additional revenue increases were reported at Mandalay Bay, the Mirage, Luxor, New York-New York, Excalibur, Monte Carlo, Circus Circus and at the half-owned CityCenter complex. Overall, room revenue was up 10 percent at wholly-owned domestic resorts.
Overall, MGM Resorts said quarterly net revenue companywide was $2.3 billion vs. $1.5 billion in the fourth quarter of 2010, thanks largely to the addition of MGM China to the corporate numbers. Excluding MGM China, net revenue was up 7 percent.
MGM Resorts lost $113.7 million or 23 cents per share in the quarter, down from $139.2 million or 29 cents a year earlier.
The results were affected by several special gains and losses, including an income tax benefit of $44 million related to the company’s Macau tax liability.
That was more than offset by noncash accounting charges to write down the value of the company’s investment in the Borgata resort in Atlantic City by $62 million and to write down the value of its investment in the Silver Legacy hotel-casino in Reno by $23 million.
At MGM China, net revenue of $719 million was up from $570 million and adjusted property EBITDA – a profitability measure – increased 23 percent to $174 million.
MGM China on Wednesday declared a $400 million dividend, which will result in a payment of $204 million to MGM Resorts as a 51 percent shareholder.
CityCenter on the Las Vegas Strip, as previously reported, posted improved results.
Net revenue there from resort operations increased from $231 million to $265 million and MGM Resorts’ share of its losses fell from $38.4 million to $10.3 million.
Adjusted property EBITDA from CityCenter resort operations increased 62 percent to $58 million.
EBITDA means earnings before interest, taxes, depreciation and amortization.
In a statement, MGM Resorts CEO Jim Murren said the company boosted results thanks in part to improvements in its M Life customer loyalty program and targeted reinvestments in properties.
"Financially, our revenues and margins have improved year over year increasing our cash flow and strengthening our financial profile," Murren said. "Going forward we expect to build off of these strategies to grow our company and maximize shareholder value."
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