MGM Resorts International CEO and President Bill Hornbuckle has praised the ‘strong’ operational performance of the company in Q1 as increased weekend demand and a ‘better mix of business’ led to increased revenues and a reduction in net losses.
Publishing its ‘First Quarter 2022 Financial and Operating Results’ report, MGM detailed consolidated net revenues of $2.9bn, an increase of 73% YoY attributable to the inclusion of the operating results of Aria following its integration in Q4 of last year.
However, the Group did note that revenues were negatively impacted by COVID-19, which caused problems via the Omicron variant, forcing restrictions in indoor areas early in the quarter.
The Las Vegas Strip Resorts division posted revenues of $1.7bn, up 205% YoY, displaying the strong land-based recovery from the lockdowns in 2020 and 2021. Meanwhile, regional operations also saw signs of growth with revenues reaching $891m, up 25% YoY and 11% on pre-pandemic results.
Increased revenues across the board saw MGM vastly reduce its net losses YoY, as the Group posted a net loss of $18m compared to $335m in Q1 of 2021. Whilst it has made progress in the last year, it remains $51m short of the $33m net profit made in Q1 of 2019, the last Q1 before the pandemic began.
Assessing the financial and operational performance of the Group, Hornbuckle commented: “We delivered a strong first quarter in our domestic operations driven by weekend demand and a better mix of business. Our midweek business is improving with each quarter and our group base is growing after a tough January. The results demonstrate the robust demand for our gaming entertainment offerings with the backdrop of increased sports and entertainment programming in the Las Vegas market.
“We reached another milestone in the completion of our asset-light strategy with the closing of the VICI transaction, allowing us to simplify our corporate structure and bolster our liquidity while deploying capital into growth projects with the highest shareholder return.”
Breaking down the Las Vegas Strip results by vertical, casino revenue increased 105% YoY up to $475m, whilst table games win increased by 132% to $296m. Similarly, slots handle increased by 101% up to $427m from a win percentage of 9.3%.
Corporate expenses, which includes share-based compensation for corporate employees, increased to $111m during Q1 up from $78m in Q1 of FY2021.
Taking into consideration MGM’s total performance in Q1, it reported a consolidated Adjusted EBITDA of $670m and a consolidated Adjusted EBITDAR margin of 23.5%.
“Our strong liquidity position, coupled with our confidence in the long-term recovery of our core business, has allowed us to continue to focus on maximizing long-term shareholder value. To that end, we continued to repurchase our stock in the first quarter, reaching over $1bn during the first quarter of 2022 and we repaid $1bn of notes in March,” added Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts International.
“We are disciplined in our approach to capital deployment and are focused on maintaining a strong balance sheet with adequate liquidity, while at the same time pursuing growth opportunities with the greatest return to shareholders.”
MGM has reported its results just after notifying stakeholders of its $607m bid to acquire the Swedish online gaming firm LeoVegas, which has been unanimously recommended by the latter’s board.
Hornbuckle concluded: “We announced the tender offer for 100% of the shares of LeoVegas which will allow us to expand into international online gaming with a world-class management team, strong IT platform and growth prospects. We remain focused on achieving our vision to be the world’s premier gaming entertainment company.”