Mohegan better prepared to emerge from pandemic after strong Q3 performance

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Mohegan Gaming & Entertainment has announced operating results for its third fiscal quarter ended June 30, 2021, claiming to be well positioned to recover from the impacts of the COVID-19 pandemic.

The firm revealed net revenues of $328.2m versus $107.2m year-on-year, ahead by 206.1%, while income from operations of $64m compared with an operating loss of $20.5m in the corresponding period 2020. Adjusted EBITDA was reported as $101.7m versus $8.4m year-on-year, representing a 1,111.2% increase.

CEO Raymond Pineault told investors: “Another quarter of strong results demonstrates that MGE remains well positioned as we continue to emerge from the pandemic. In addition, we recently announced Mohegan Digital, which will provide leading sports betting and digital gaming solutions to our loyal customers and attract new customers on a broader scale. 

“This new business line will diversify our future revenue streams and contribute to the financial stability of MGE. Finally, MGE Niagara Resorts reopened to the public on July 23 after just over 16 months of closure due to COVID restrictions in Ontario.”

CFO Carol Anderson noted: “These results are indicative of the continued recovery as most remaining COVID-related restrictions were lifted at our United States properties during the quarter. 

“At our flagship property Mohegan Sun, while revenues were below third quarter 2019 levels, which is the closest comparable due to property closures in the third quarter of 2020, adjusted EBITDA was $82.4m, 22.5% favorable to the third quarter of 2019, and EBITDA margin was up 1,065 basis points over the same period. 

“Outside of Connecticut, ilani in Washington State continues to perform ahead of expectations, and Mohegan Sun Pocono, Mohegan Sun Las Vegas and Resorts are generating positive results.”

According to Mohegan, the year-on-year improvements relate to company-wide COVID-related property closures in 2020. When compared to the third quarter of 2019, consolidated net revenues declined 5.6%, while adjusted EBITDA increased 24.6%. 

While the adjusted EBITDA improvement was largely driven by reductions in operating costs and expenses, including lower payroll costs and marketing expenses, net revenues continued to be impacted by the COVID-related closure of MGE Niagara Resorts and state-mandated social distancing protocols at its other properties. 

Excluding the impact of the closure of MGE Niagara Resorts for the full quarter and adjusting primarily for table hold, the adjusted EBITDA margin would have been 33.9% for the quarter, up 707 basis points from 26.8% in the third quarter of 2019.  

Mohegan Sun generated quarterly sequential improvement due to increased visitation, positive gaming trends and removal of the final remaining COVID-related restrictions on May 19th. Adjusted EBITDA increased 323.7% for the quarter, reflecting the easier year-on-year comparison. 

When compared to the third quarter of 2019, adjusted EBITDA increased 22.5%, primarily due to lower labor and marketing costs and reductions in certain non-gaming amenities. Most notably, when adjusting primarily for normalized table hold, the adjusted EBITDA margin would have been 36.6%, up 635 basis points from 30.2% in the third quarter of 2019.