Despite a series of COVID-impacted financial declines felt in the group’s latest financial report, Mohegan Gaming and Entertainment (MGE) has asserted trust in its continuing turnaround efforts and those of the broader industry.
Softening of gaming demand
Revenues declined by 42.2 percent from $399.1m to $230.8m during the group’s first fiscal quarter, ending December 31, 2020, driven by a softening of gaming demand as COVID infection rates rose in its operating regions, as well as the effect of ongoing closures and capacity reductions.
In addition, MGE states that, as Mohegan Sun Pocono was briefly closed for 23 days in December and early January, it was “further impacted,” although MGE Niagara Resorts remained closed for the entire portion.
Visitation and sales patterns
However, it is noted that, by the end of the calendar year, visitation and sales patterns began to change, with the positive momentum continuing into the current year.
Reductions were felt in all sales categories, with casinos falling 34.4 percent to $173.2 million (2019: $264.2 million); food and drinks plummeting 78.1 percent to $11.04 million (2019: 50.5 million); hotels dropping 40.1 percent to $16.5 million (2019: $27.5 million); and retail, entertainment and other services declining 47 percent to $30.01 million (2019: 56.6m).
Net loss dropped from sales of $9.4m a year earlier to $26.7m, and adjusted EBITDA decreased by 42.6 percent to finish at $40.4m from $75.1m in 2019.
Lower table holds
Except the effects of the Mohegan Sun Pocono and MGE Niagara Resorts closures, lower table holds and adverse winter weather conditions, net sales and adjusted EBITDA would have decreased by 26.8 percent and 23.8 percent, respectively.
Mario Kontomerkos, president and CEO of MGE said: “As we move through the early part of 2021, we have an eye on a broader industry recovery and I am confident in MGE’s position to benefit from it.
“Performance in the fiscal first quarter was challenging as COVID cases climbed substantially in virtually all of our markets, but the pressure we observed on our revenues and profitability largely began to reverse itself in late December with positive momentum observed throughout January, most notably at Mohegan Sun.
Significant cost reduction efforts
“Despite these challenges, adjusted EBITDA margin at the flagship property grew versus the prior-year quarter, reflecting the permanence of significant cost reduction efforts undertaken over the last year.
“Subsequent to the end of the quarter, MGE successfully completed its refinancing which extended our nearest maturities, increased our financial flexibility, and provided us with ample liquidity as we move forward.
“We remain quite positive that our business has been optimised to benefit from what we foresee to be significant pent-up demand for leisure consumption in the months ahead.”