MGM cites ‘sharpened focus on operational efficiency’ for record Q4

MGM Resorts has lauded the achievement of several “strategic milestones” through 2021, as the casino and entertainment operator eyes further sports betting and igaming growth, as well as geographical expansion, moving forward.

The company, which anticipates closing its $1.075bn divestment of Las Vegas’ Mirage to Hard Rock during the second half of the year, is expecting key land-based expansion to occur within Japan in addition to closer to home in New York.

In the former, the group, says Bill Hornbuckle, CEO and president of MGM, is looking to “diversify geographically into what we believe will be one of the world’s largest gaming markets in the world”.

Working alongside its Orix partner within the city of Osaka, MGM intends to submit an area development plan to central government by April as it remains “hopeful and confident in being awarded a license later this year to build an integrated resort in Japan”.

Stateside, the group stresses encouragement at “the continued progress being made in the commercial gaming license opportunity in New York,” with MGM believing that it is “extremely well positioned” due to existing Empire City operations.

Hornbuckle added: “I’d like to spend some time highlighting the significant milestones we achieved in ’21 to transform our company. First, we took steps to complete our goal of monetising our real estate assets meaningfully bolstering our domestic cash position. 

“We have simplified our structure, bringing the operations of City Center fully under our control, selling MGP to Vici, a transaction that is expected to close in the coming months.

“We are also making strategic changes in our Las Vegas portfolio with the announced acquisition of the operations of the Cosmopolitan of Las Vegas and the sale of the operations of the Mirage. 

“We believe these transactions will enhance and diversify our offerings in one of the most desirable and competitive destinations in the world.”

These comments come as the group reports its performance through 2020’s fourth quarter and full-year, with revenue up 105 per cent to $3.05bn (2020: $1.49bn) due to the removal of mandated operational and capacity restrictions as well as an increase in travel.

The prior year’s quarter, it is added, was negatively affected by temporary closures at certain properties and operational restrictions due to the COVID-19 pandemic.

MGM’s Las Vegas resorts saw revenue increase 277 per cent to $1.8bn (2020: $479.7bn), regional operations grew 51 per cent to $899.6m (2020: $595.4m), and MGM China increased three per cent to close at $314.7m (2020: $304.7m) to reach “an all-time record 14 per cent in market share”.

Through the quarter, group-wide net income attributable to MGM Resorts of $131m compared to a loss of $448m in the prior year quarter, with adjusted EBITDA closing at $821m.

“In 2021, we further bolstered our liquidity position while returning $1.75bn to shareholders via share repurchases and making strategic investments that align with our vision to be the world’s premier gaming entertainment company,” said Jonathan Halkyard, CFO and treasurer of MGM

“We remain committed to maximising long-term shareholder value and our capital allocation strategy continues to be anchored in three key priorities: maintaining a strong balance sheet, programmatically returning cash to shareholders, and investing in targeted growth opportunities.”

For the full-year, revenue swelled 88 per cent to $9.68m (2020: $5.16m); with net income closing at $1.3bn from a loss of $1bn one year earlier, although this includes a $1.6bn net gain related to the consolidation of CityCenter, and adjusted EBITDAR of $2.4bn.

Net revenues of $4.73bn across Las Vegas venues represents an increase of 111 per cent compared to the prior year’s $2.24bn, and a decrease of 19 per cent compared to 2019, which grows to 22 per cent when excluding Aria in 2021 and Circus Circus Las Vegas in 2019.

Regional operations saw revenue increase 72 per cent year-on-year from $1.96bn to $3.39bn but drop four per cent when compared to 2019, with MGM China reaching $1.2bn, an increase of 84 per cent compared to the prior year’s $656.7m and a decrease of 58 per cent from 2019.