MGM’s third quarter revenues record sequential improvement

Casino operator MGM China’s third quarter revenues and the adjusted property EBITDAR were $47 million and negative $96 million, respectively, which improved sequentially from the second quarter, said Bill Hornbuckle, CEO and President of MGM Resorts International.
Announcing the property’s earnings during its third quarter earnings call with analysts, the official said, “Marketwide daily visitation has been very steadily improving into October’s Golden Week. And since the second week of the month, we are seeing improved volumes across all segments sequentially week on week.”
The U.S. based casino operator MGM Resorts International expects that the rate of recovery will continue to be gradual driven by premium mass market, which both its Macau properties are “ideally positioned to capture.”
“We continue to believe in long-term success of Macau, and we’ll continue to invest in strengthening our market position there. Currently, construction of the additional suites in the south tower of MGM Cotai is under way and will be ready in mid-2021,” said Hornbuckle.
Amid the economic downturn caused by Covid-19, the operator begun remodeling its MGM Macau villas and the gaming space on level 35. In the longer term, Hornbuckle said that they also have the ability and the desire to build another hotel tower at MGM Cotai, along with entertainment assets to diversify their offerings.
“Our liquidity position remains strong. As of September 30, MGM had over $7.8 billion of consolidated liquidity which included $1.4 billion at MGM China,” said Hornbuckle.
Meanwhile, Hubert Wang, CEO and President of MGM China, said on the same call that the volume of visitors during the Golden Week was somehow strong coming out of the month end in September, due to the first week of nationwide Individual Visit Scheme reactivation.
However, post Golden Week, Wang said that, naturally, the volume dropped down.
“But I’m happy to say that in the past couple weeks, we have seen some regrowth in – across all segments and that has generated enough gross gaming revenue to allow us to be slightly above breakeven,” he said.
Meanwhile, commenting on the city’s gaming concessions’ termination in June 2022, Hornbuckle said, “To date, they seem to be saying they’re on track which, as you know, is by June 2022. They’ve to give six months notice. So 2021 will be very active unless they delay it a year. Given what’s happened with Covid-19, I guess they could.”
Previously, a local gaming association has called on the government to extend the current gaming concessionaires until an “appropriate time.”
Brokerage J.P. Morgan Securities has also forecasted that it would not be a surprise to see the renewal bidding process postponed by a year or so.
To date, very little information has been provided by the government regarding the matter.