Focus on recovery for MGM Resorts as Q1 trading update reveals ongoing cost of Covid pandemic

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MGM Resorts International today published its financial results for the quarter ended March 31, 2021. And while the firm reported significant operating losses, CEO Bill Hornbuckle sought to focus on recovery and growth as consumer demand strengthened at its domestic properties during the quarter.

That consumer demand, allied to significant changes made to MGM’s operating model, have positioned the firm to capitalize on the recovery, he advised. 

“Our regional properties achieved record first quarter adjusted Property EBITDAR and adjusted Property EBITDAR margins,” said Hornbuckle. “Las Vegas operating results improved sequentially, leisure demand is improving, and we now have a tangible path to bring conventions and entertainment back at scale.”

“We are also deeply focused on our long-term goals including investing in digital to drive deeper customer engagement and BetMGM, our US sports betting and igaming venture, which continues to impress as the leading operator in US igaming and the top three operator in US online sports betting. Our future is bright.”

Less positive were the company’s Q1 financials, with net revenues of $1.6bn falling 27% year-on-year. While the prior year quarter was negatively affected by property closures for a portion of the quarter, the current quarter was negatively affected by midweek property and hotel closures, lower business volume and travel activity and ongoing operational restrictions due to the pandemic primarily at its Las Vegas Strip Resorts;

Consolidated operating loss was $247m compared to consolidated operating income of $1.3bn in Q1 2020, which included a $1.5bn gain related to the MGM Grand Las Vegas and Mandalay Bay real estate transaction.

MGM Resorts’ net loss in the quarter was $332m compared to net income of $807m in the prior year quarter, which included the aforementioned $1.5bn gain.

“Our robust liquidity position provides us with significant flexibility amid an improving operational backdrop. As such, we have begun to return capital to shareholders through share repurchases during the first quarter,” said CFO and Treasurer Jonathan Halkyard

“Going forward, we will be disciplined in allocating our capital by maintaining a strong balance sheet, pursuing targeted growth opportunities and returning cash to shareholders.”