Mohegan Gaming & Entertainment, the global integrated resort developer and operator, has published its operating results for the second fiscal quarter of trading ended March 31, 2019. Net revenues stood at $307.7m compared to. $332m year-on-year, equal to a 7.3% decrease. Income from operations fell by 60.4% to $22.2m from $56.1m in the prior year period, primarily driven said the firm by “…one time accelerated depreciation due to the closure of Casino of Wind”.
“Volume trends across our portfolio remain in line to better than expected as overall gaming volumes at our flagship property, Mohegan Sun, remain robust despite completing our second full quarter of increased competitive pressure in the Northeast,” said Mario Kontomerkos, President & CEO. “Adjusting for unusually low table hold, overall MGE EBITDA would have been largely in line with our expectations, flat with last year’s comparable period, and well ahead of recent fiscal year Q1 2019 performance.
“At the same time, non-gaming results continue to be healthy and remain a driving factor for our growth at Mohegan Sun. These revenue enhancements have been driven, in part, by the recent adoption of our $100m revenue and cost improvement program – a plan we remain committed to delivering over the next several years.”
Kontomerkos added: “Outside of the Northeast, cash flows from our managed portfolio grew strongly, up 86% year over year. Looking ahead, in June we expect to assume operational control of two major Niagara Falls, Canada assets which will mark the first international operations for MGE and will provide increased earnings and cash flow diversity for our stakeholders.
“Similarly, we have begun to mobilize construction at our development site in Incheon, South Korea, having completed our negotiations with our general contractor and following the receipt of all necessary construction permits and approvals.”
Turning to adjusted EBITDA, Mohegan earned $67.2m in the quarter, 15.9% down on the $79.9m in the prior year period. Consolidated net revenues and adjusted EBITDA declined during the quarter, driven by lower gaming revenues at Mohegan Sun and Mohegan Sun Pocono largely driven by unfavorable hold in the quarter at both properties.
These declines were partially offset, claimed the company, by improved non-gaming revenue growth, including entertainment and hotel revenues, at Mohegan Sun, as well as stronger corporate adjusted EBITDA, driven by tighter expense management and improved financial performance at ilani Casino Resort.