Gaming | MGM Resorts posts fourth-quarter loss

MGM Resorts International, the largest casino operator on the Las Vegas Strip, reported a wider fourth-quarter loss as gambling revenue from Macau plunged.
The loss widened to 70 cents a share from 12 cents a year earlier, the Las Vegas-based company said Tuesday in a statement. MGM China revenue decreased 22 percent, driven by its VIP table games business, which was down 39 percent.
Macau, the only place in China where casino gambling is legal, is experiencing a months-long slump as a government crackdown on corruption in the mainland prompts high-rollers to avoid conspicuous consumption. Wynn Resorts Ltd.’s earnings disappointed as a result of a Macau shortfall. Las Vegas Sands Corp.’s earnings beat estimates only on higher revenue from its Singapore casino.
MGM is studying ways to boost shareholder value as the stock has declined 16 percent in the past 12 months. Among the strategies being reviewed are the potential for a real estate investment trust, or REIT, and selling parts of or refinancing CityCenter, its casino resort joint venture on the Las Vegas Strip, Dan D’Arrigo, MGM’s chief financial officer, said Tuesday in a telephone interview.
“The concept of converting gaming assets to REITs is not a new one,” D’Arrigo said in a conference call with analysts. “It was very active, we discussed before the recession. And more recently, the dialogue is there again.”
While D’Arrigo said “there’s nothing to report” on the possibility of a new financial structure, “we’re pitched by every bank that is out there in terms of whether or not we should do that. We look at this all the time. We believe that our assets are undervalued.”
MGM China, the company’s separately traded subsidiary, declared a special dividend of USD400 million, larger than anticipated, according to Anthony Wong, an analyst at UBS Securities in Hong Kong.
The Chinese subsidiary had a record year in 2014 and its balance sheet was strong enough to support the dividend, D’Arrigo said in a telephone interview. Construction of a new casino scheduled to open next year is proceeding “full steam ahead,” he said. Christopher Palmeri, Bloomberg