MGM Resorts International has reported its financial results for the quarter ended September 30, 2018. Jim Murren, chairman and CEO, updating investors, said: “Our third quarter operating performance exceeded our expectations despite the tough year-on-year comparison, resulting from robust casino business and an exceptionally strong event calendar last year.”
Operating income at the company’s domestic resorts was $435m for the third quarter of 2018 and was impacted by $31m in preopening expenses at MGM Springfield, disruption related to the repositioning and rebranding at Park MGM and a decrease in casino and non-casino revenues at the Company’s Las Vegas Strip resorts. Operating income in the prior year quarter was $545m. Domestic Resorts Adjusted Property EBITDA decreased 12% to $627m in the third quarter of 2018 and decreased 13% on a same-store basis.
Murren stated: “During the quarter, we successfully opened MGM Springfield, which has been well received by our customers. Earlier this month, we also officially opened the NoMad Hotel at Park MGM, which will help expand our customer reach. We remain highly focused on our strategic priorities, including maximizing the performance of our portfolio of premier properties, driving growth in free cash flow and delivering on our capital allocation strategy.”
On the outlook, he explained: “Stabilizing market conditions are positioning MGM Resorts for improvement in the fourth quarter. Looking further out, our growth will be driven by the continued ramp of our newly opened properties along with our disciplined approach to improve our margins throughout our resort portfolio. We also are executing on additional targeted growth opportunities in key areas including sports betting and Japan’s upcoming Integrated Resort market. Our focus on balance sheet strength will help ensure prudent capital allocation and the continued return of capital to shareholders. Overall, we remain confident that we will deliver on our 2020 goals.”
Murren concluded: “We expect to deliver positive results in the fourth quarter at our Las Vegas Strip resorts with net revenues up slightly and Las Vegas Strip REVPAR up one to two percent. We also expect Las Vegas Strip Adjusted Property EBITDA margins to be flat to up slightly. These projected results are in line with our previously stated full year guidance. Heading into 2019, the completion of Park MGM and NoMad, the expanded MGM Grand convention space, and a better backdrop in group business position us well in Las Vegas. We will also benefit from a full year of operations at MGM Springfield.”
Third Quarter 2018 Financial Highlights:
- Diluted earnings per share of $0.26 in both the current and prior year quarters;
- Consolidated net revenues increased 7% compared to the prior year quarter to $3bn;
- Net revenues decreased 2% compared to the prior year quarter at the company’s domestic resorts to $2.2bn and decreased 3% on a same-store basis, excluding contributions from the opening of MGM Springfield on August 24, 2018;
- REVPAR(1) decreased 3.9% compared to the prior year quarter at the company’s Las Vegas Strip resorts;
- Operating income of $435m at the company’s domestic resorts, compared to $545m in the prior year quarter. The current quarter was impacted by $31m of preopening expenses at MGM Springfield, continued disruption at Park MGM and a decrease in casino and non-casino revenues at the company’s Las Vegas Strip resorts;
- Net income attributable to MGM Resorts of $143m, compared to $148m in the prior year quarter
