MGM Q3 losses widen, places confidence on eVisa resumption
MGM China recorded a widened loss during the third quarter of this year as total revenues stood at HKD687 million, compared to HKD1.1 billion in the second quarter.
The group recorded negative adjusted EBITDA of approximately HKD536 million, compared to negative adjusted EBITDA of approximately HKD382 million previously.
This comes as the city suffered its biggest Covid-19 outbreak in mid-June that led to a partial lockdown in July, leading to a halt in non-essential businesses such as casino activities for nearly two weeks.
The 12-day suspension hampered Macau visitation due to strict border regulations for mainland travelers.
For now, the gaming operator looks forward to the resumption of electronic visas for mainland travelers to Macau. This resumption commenced November 1, a move that has long been awaited by the tourism sector since electronic visas were halted in 2020 due to the Covid-19 pandemic.
The issuance of group package tours to Macau and eVisas under the Individual Visit Scheme (IVS) is shaping up to be a massive boost for the SAR’s gaming and tourism operators, which have been negatively affected since the pandemic began in early 2020.
In an earnings call with analysts, Bill Hornbuckle, CEO and president of MGM Resorts remarked, “We’re encouraged by the signal and what it means for Macau. Macau is obviously a SAR, but it is considered part of broader China in every way and that shapes performance. So, in trying to give support, it is meaningful to us.”
MGM Cotai was reopened by local authorities on Wednesday, after the site was locked down on Sunday as one of its croupiers tested positive for Covid-19. Guests and staff inside the resort were required to quarantine and undergo nucleic acid testing (NAT), and from these all tested negative.
Speaking with analysts, Hubert Wang, president and COO of MGM China said, “These things can happen from time to time if the policy is still in place.”
“But overall, I think over the long run, it is a positive. […] I think that we’re looking at OpEx of about USD1.5 million a day, or in that range,” he said.
MGM China had market share of 13.2% in the third quarter. Occupancy was 21%, compared to 25.6% in the second quarter.
