MGM delays Cotai opening to January
MGM Resorts International announced on Friday that it will postpone the opening of its second Macau resort to January 29, 2018, following damage sustained by Typhoon Hato in August.
In a statement filed last week to the Hong Kong Stock Exchange, MGM Resorts International said it had been forced to compile “a revised schedule for completing repair works and processing governmental inspections necessary for obtaining relevant licenses to operate MGM Cotai.”
The new opening date will still allow the company to take advantage of the Chinese Lunar New Year holiday, which begins on February 16 and is considered one of the most profitable weeks in the Macau calendar.
Islands-based casinos such as MGM Cotai – which is currently under construction – were hit harder by Typhoon Hato than those on the Macau peninsula. Gaming analysts predicted last month that operators with greater Cotai exposure would bear the brunt of the natural disaster.
Yet despite the damage caused by Typhoon Hato, which struck on August 23, the delay is only the latest of many for the gaming operator’s second Macau property.
The property was previously scheduled to open in the fourth quarter of this year, with its 2016 opening having been delayed thrice.
The gaming operator also announced that it expects the cost of the property’s development to increase from HKD26 billion to HKD27 billion (excluding land and capitalized interest), due to the delays and repairs.
Gaming analysts have suggested on several occasions that the delayed openings of some Macau-based properties might give operators certain strategic advantages as they wait for signs of a stronger MSAR economy, while enabling them to minimize overheads.
However at least one brokerage firm is warning of short-term share price weakness in response to the delay.
“We do not rule out the possibility of near-term share price weakness for MGM China as a result of the delay,” remarked Daiwa Capital Markets in a note to Nikkei Asian Review last week.
“Indeed, there are risks of marginal earnings cuts by the street in the foreseeable future.”
In conjunction with the Las Vegas shooting, which took place in a room at the MGM-
operated Mandalay Bay Casino, MGM Resorts International shares sank 5.6 percent to 30.77 by market close yesterday. Its China subsidiary, MGM China, slipped 2 percent to HKD18.34. DB
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I don’t believe MGM Cotai will open by January, 2018.
From what I have read and discovered, immediately following Typhoon Hato, MGM mentioned the opening was still “on schedule” for 2017 – I belive they made this announcement on September 7, 2017.
On and around September 6-10, CEO Jim Murren sold allot of stock in MGM, as well as many executives and board members I believe. Jim Murren sold his stock September 7th and other dates around that time as well.
Now, I believe MGM and others are stating MGM Cotai will open January, 2018.
In my opinion, the worst Typhoon in Macau in over 50 years, over half a century, will delay the opening of MGM Cotai well past January, 2018, as well as past the lucrative Chinese New Year.
Mike