MGM China has released its financial report for the first quarter of 2019 and things look good almost all the way around. The company, part of the MGM Resorts International casino giant, operates the MGM Macau and MGM Cotai and had a very successful start to the new year.
According to a filing from Tuesday, MGM China’s net revenue for the first quarter increased by 23.5% year-on-year to $734.25 million. The boost was fueled by performance at MGM Cotai, which opened in February 2018. Additionally, the property added 25 new-to-market tables this past January, giving gamblers more options and the venue more income possibilities.
EBITDA (earnings before interest, taxes, depreciation and amortization) increased, as well. It rose 26.8% year-on-year to $203 million. That follows a 2018 fourth-quarter year-on-year increase of 9.1% to $179.7 million.
MGM Macau saw its EBITDA increase by 13% from the last quarter of 2018 to the first quarter of this year, reaching $140 million. At MGM Cotai, the EBITDA jumped 17% quarter-on-quarter to $69.34 million.
The release of the results followed that of MGM Resorts from Monday. MGM CEO Jim Murren said at that time, “MGM Cotai continued to ramp and contributed to the … growth in adjusted property EBITDA at MGM China. During the quarter, we were very pleased to receive the extension to our Macau sub-concession to June 2022. We remain deeply committed to Macau’s continued evolution into an international leisure and tourism destination.”
MGM China CEO Grant Bowie added in a prepared statement, “Along with the growth of our business, we are delighted to see our gaming sub-concession extended. We are grateful for the support of the Macau government and remain committed to the region’s continued evolution into a global leisure and tourism destination.”
Industry analysts have already stepped forward to offer their take on the results, with a mixed bag of forecasts. Jefferies LLC indicated that the earnings reported by MGM China “continue to benefit from the MGM Cotai turnaround” and Sanford C. Bernstein emphasized that the results “beat street estimates with adjusted property EBITDA … 6 percent above census.”
JP Morgan Securities (Asia Pacific) offered a different position, asserting that the company’s sustainability “might be a bit debatable.” It explained, “The upsides [in the first quarter] came from favourable luck in both VIP/mass and performance of peninsula property, while the pace of Cotai’s profit ramp wasn’t very strong if adjusted for luck.”
