MGM Resorts International has published its financial results for the quarter and year ended December 31, 2019 showing consolidated net revenues ahead by 4% compared to the prior year quarter to $3.2bn.
Consolidated operating income increased to $3bn compared to $336m year-on-year including a $2.7bn gain related to the firm’s Bellagio real estate transaction. Net income, again including the Bellagio transaction, came in at $2bn versus a net loss of $23m year-on-year.
According to the update, consolidated adjusted EBITDAR decreased 3% to $682m in the current quarter compared to $703m in the prior year quarter, primarily attributable to a decrease in table game revenues driven by Far East baccarat at the company’s domestic resorts and the inclusion of $24m in insurance proceeds in the prior year quarter.
“We are proud of the progress we made during 2019 as we took important steps to evolve our organization,” said Chairman and CEO Jim Murren. “However, our fourth quarter results were below our expectations, primarily due to lower than expected hold, weakness in Far East baccarat, and certain one-time items.
“All other dimensions of our business in Las Vegas performed on or ahead of plan. For full year 2019, we generated strong consolidated net revenue and adjusted EBITDAR, which increased 10% and 6%, respectively, year over year. We are also executing on our stated MGM 2020 plan, which is realizing material cost savings and revenue enhancements and transforming the way we operate to position MGM Resorts for future growth and long-term value creation.”
He added: “During the year, our team made meaningful strides in implementing our asset-light strategy to optimize our portfolio, strengthen our balance sheet and enhance free cash flow. This strategy is best positioning MGM Resorts for the future by providing the flexibility to invest in higher return growth opportunities.
“Following the monetization of the real estate of Bellagio and the sale of Circus Circus Las Vegas, we continued our momentum into the first quarter of 2020 with our announcement to monetize the real estate of MGM Grand Las Vegas. Our previously announced transactions are expected to provide total net cash proceeds to MGM Resorts of $8.2bn, a portion of which we used to retire $3.1bn of debt in the fourth quarter.
Murren concluded: “Looking ahead, we remain focused on monetizing our remaining owned real estate assets, which we expect will allow us to invest into high growth initiatives such as Japan and sports, as well as continue to further fortify our balance sheet and return capital to shareholders.”