Macau factors into MGM Resorts fourth quarter net loss

Macau factors into MGM Resorts fourth quarter net loss - 17th February 2015


Gaming Casinos Markets Business Entertainment Las Vegas

MGM Resorts International operates just one casino in Macau, but the troubles that have besieged the market factored into the company’s fourth quarter results.

The casino company, which operates 10 resorts on or near the Strip, said Tuesday it increased its net loss in the quarter that ended Dec. 31 despite an otherwise positive three months from its U.S.-based operations.

Overall, MGM Resorts reported a net loss of $342.3 million, compared with a loss of $56.8 million in the same quarter a year ago. The result translated into a loss per share of 70 cents compared to a loss of 12 cents per share last year. A large income tax provision during the quarter also attributed to the net loss.

Analysts polled by Thomson Reuters expected MGM Resorts to report a profit of 6 cents per share.

Total revenue for the company during the quarter was $2.38 billion, a decline of 5.1 percent, which included a 5.5 percent increase from MGM’s Strip resorts.

Morgan Stanley gaming analyst Thomas Allen noted cash flow at the company’s “core” properties was up 17 percent year-over-year and cash flow from the luxury resorts, such as Bellagio, increased 3 percent.

“MGM Resorts International reported its best fourth quarter (cash flow) since the peak in 2007 and its best full year in six years at its wholly owned domestic resorts,” MGM Resorts Chairman Jim Murren said in a statement.

However, the MGM Macau suffered a 22.4 percent revenue decline during the quarter, reflective of Macau’s financial turmoil, which has seen the market suffer eight straight months of declining revenue.

MGM said a final dividend for 2014 of $120 million will be awarded to MGM China shareholders. The company will receive $61 million, based on its 51 percent ownership stake. In addition, MGM China announced a special dividend of $400 million. MGM Resorts will receive $204 million.

For all of 2014, MGM Resorts said its total revenue increased 3 percent to $10.1 billion, which included a 5 percent increase from its Las Vegas and regional properties.

MGM Macau revenue for the year declined 1 percent, but CityCenter — which is 50 percent owned by the company — reported net revenue from resort operations of $1.2 billion, a 3 percent increase.

MGM Resorts also gave a little more information about the settlement last year of the Harmon construction defect lawsuit with Perini Building Company. MGM said its proceeds from the settlement agreement, combined with certain prior Harmon-related insurance settlement proceeds, will result in a gain of approximately $160 million to be recorded by CityCenter during the first quarter of 2015.

This is a developing story. Check back for updates.

(Las Vegas Review-Journal)