Mohegan Gaming & Entertainment announced operating results for its first fiscal quarter ended 31 December 2019, showing net revenues of $399.1 million, up 24.9 percent year-on-year from $319.5 million.
Operating income was $43.4m, unchanged from $43.4m in the preceding year, while adjusted EBITDA came in at $75.1m, up 4.5 percent year-on-year from $71.9 m. Consolidated net revenues grew 24.9 percent, mainly driven by MGE Niagara Resorts’ recent acquisition.
Mohegan Sun Pocono pushed revenue increases on a similar basis, and continued outperformance from non-gaming revenue growth, including Mohegan Sun entertainment and hotel revenues. These increases were offset in part by lower volumes of gaming at Mohegan Sun.
Adjusted EBITDA rose 4.5 percent over the year, representing the above-noted contributions as well as better Marketing, Production and Other segment EBITDA. Importantly, the company said, accounting for the impact of MGE Niagara Resorts, the overall Adjusted EBITDA was roughly flat with the first quarter of the previous year, with adjusted EBITDA margins above the amount of the previous year, demonstrating the positive impact on the underlying core business.
During the quarter, net revenues and Adjusted EBITDA decreased moderately, driven by lower overall gaming revenues that were partially offset by stronger non-gaming results. Table volumes fell by 6.7%, while table volumes dropped by 6.4%.
Net revenues grew driven by all revenue segments, though most notably by hotels and food & beverages. Gaming revenues experienced an increase in both table drop and slot handle over time, both translating into gross table win and slot win changes. Better performance represents a more fair competitive environment in overall gaming and improvements to overall land. The year-over-year rise in Adjusted EBITDA was driven largely by the growth in table games and the positive contribution from hotel and food & beverage.
Top-line performance at the recently acquired MGE Niagara Resorts has been adversely affected by the quarter’s combination of lower than anticipated table hold and the effects of particularly challenging weather.
Mario Kontomerkos, President and CEO of MGE said: “I am pleased to report that fiscal 2020 is off to a solid start with consolidated first-quarter revenues and adjusted EBITDA above prior year results, driven by the strong year over year growth in revenue and Adjusted EBITDA at Mohegan Sun Pocono and the inclusion of MGE Niagara Resorts.
“Importantly, on a like for like basis, excluding the positive contribution of MGE Niagara Resorts, overall adjusted EBITDA was roughly flat with the prior year while overall adjusted EBITDA margins improved, a remarkable achievement considering the competitive pressures in the northeast region over the last 18 months.
“Performance at our flagship property Mohegan Sun was strong due to better expense management and continued strong performance in non-gaming segments, highlighted by our recent hosting of the Miss America Competition.
“Looking beyond the United States, construction is progressing on-time and on-budget in Inspire Korea, while the integration of the MGE Niagara Resorts progresses well despite the impact of lower table hold rates and adverse weather in the quarter. Finally, our expansion into Las Vegas took a large step forward this week, as MGE and our partner Virgin Hotels began the renovation of the future Virgin Hotels Las Vegas set to open in late 2020.”