MGM Resorts has reaffirmed confidence and optimism for potential prospects, including integrated resort prospects in Osaka and developments in the U.S. and Macau, as the company’s second quarter output is taking on a big hit in the face of the global health crisis.
Emphasizing that domestic operations have produced better performance than anticipated since launch, given the difficult climate, sales plummeted from $3.22 billion to $289.8 million year-on-year over the span.
This is motivated largely by the temporary suspension of the company’s domestic casino operations, continuing travel restrictions in Macau, restrictions on the number of table games permitted to operate in Macau, and restrictions on the number of seats available at each table at both Macau-based and domestic properties.
Net loss for the year hit $857.2 m, compared to an gain of $43.4 m a year ago, with an adjusted combined EBITDA loss of $492 m compared to $764 m in 2019.
In the six-month period ended June 30, 2020, sales dropped 60.2 percent to $2.54 billion (2019: $6.4 billion), net loss hit $50.3 million (2019: $74.7 million), and combined adjusted EBITDA dropped to $197 million (2019: + $1.51 billion).
Bill Hornbuckle, CEO and president of MGM Resorts explained: “During the second quarter, we began re-opening our properties across the US and have been heartened by the better than expected demand in the marketplace. I am grateful to the men and women who continue to dedicate their efforts to re-opening our properties and welcoming our guests, safely, once again.
“In addition, our MGM 2020 plan and modifications to our operating model have directly contributed to our margin improvements during the period in which our properties were open.
“As we look ahead, we believe the long term fundamentals of our business and the broader industry remain intact. However, the near term operating environment will remain challenging and unpredictable as COVID-19 case trends, health and safety protocols, and travel restrictions continue to heavily impact our business.
“We remain focused, flexible, and disciplined in navigating this evolving landscape while continuing to pursue our long term growth opportunities, supported by our strong liquidity position. As such, we remain excited about our integrated resort opportunity in Osaka, expanding our footprint in Macau, and positioning BetMGM as a leading player in the US sports betting and igaming markets.”
MGM’s Las Vegas strip resorts reported a quarterly decrease in revenue from 90 percent to $151 m on a segmented basis, the group’s regional US assets decreased to $89 m by the same amount of percentage points, and MGM China dropped 95 percent to $33 m.
Corey Sanders, chief financial officer and treasurer of MGM Resorts said: MGM“During the second quarter, we continued to take proactive steps to further bolster our already strong liquidity position by accessing the debt capital markets, amending our credit agreement to preserve access to our revolver, and causing MGP to redeem $700m of MGM Resorts’ operating partnership units for cash, under our agreement for MGP to redeem $1.4bn of MGM Resorts’ units.
“Furthermore, we continued to work aggressively to reduce operating and corporate expenses during the re-opening process while providing a safe and appealing environment for our employees and guests.
“Our domestic liquidity, excluding MGM China and MGP, is $4.8bn, before factoring in any additional change in our stake in MGP.