Gaming | MGM records 78% revenue drop in 2020

MGM China saw revenue fall by 78% to approximately HKD5.1 billion in 2020, with a negative adjusted EBITDA of approximately HKD1.4 billion, the gaming operator announced in a statement.

The gaming operator attributed the decline to the impact of the Covid-19 pandemic, which brought low visitations as a result of various strict travel restrictions and quarantine measures.

For the fourth quarter of 2020, MGM China recorded a total revenue of approximately of HKD2.4 billion, up by 550% from the third quarter. The gaming operator saw a significant turnaround for the quarter with a total adjusted EBITDA of approximately HKD367.2 million, after a loss of HKD730.6 million in the third quarter of 2020, with both properties recording a positive EBITDA.

MGM MACAU recorded adjusted EBITDA of approximately HKD247.1 million for the quarter, while MGM COTAI recorded HKD120.1 million.

Mentioning the long Golden Week holiday, the gaming operator saw an increased volume across all operations from the third quarter, as its business has been picking up since the holiday.

Overall hotel occupancy grew to 57.3% in the fourth quarter.

Despite the losses, MGM remains confident in the city’s recovery, noting that it will continue to invest in strengthening its market position.

The group announced that it has maintained a healthy financial position: as of December 31, 2020, the group had total liquidity of approximately HKD9.5 billion, comprised of cash and cash equivalents and undrawn revolvers.

“We are pleased to see MGM China turned profitable again driven by strong market share gains and continued cost mitigation efforts,” said Hubert Wang, President & Chief Operating Officer of MGM China.

“We expect the broader rate of business recovery will continue to be gradual, driven by the premium mass market which both MGM Macau and MGM Cotai are well positioned to capture,” he added.

The executive further assured that the construction of additional suites at MGM Cotai is underway and expected to be launched in mid-2021.

The gaming operator has also begun other remodeling and refurbishment projects at both properties and additional food & beverage options on gaming floors.

Ending the statement, Wang said, “We look forward to working with the government through the licensing renewal process in hopes to further our support for many more years to come.”

Fourth-quarter market-wide gross gaming revenue (GGR) declined by 70% year-over-year, compared to the 93% year-on-year decline in the third quarter.

Total visitation to Macau in 2020 was 5.9 million, compared to 39.4 million in 2019. GGR declined by 79% to the lowest level in 14 years.

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