MGM China Holdings Ltd recorded a slight 3% rise in revenue to HK$7.4 billion while Adjusted EBITDA was up 11% to HK$2.2 billion for the six months to 30 June on the back of a strong performance in mass. However, the results were primarily due to a busier first three months of the year, with the April to June period seeing a 0.4% year-on-year decline in revenue to HK$3.5 billion.
Main floor table games win during the six-month period increased 7% year-on-year and slot win increased 4%, but VIP table games fell 5% with around 80% of MGM China’s profit contributed by the mass segment.
Property EBITDA margin improved by 190 basis points year-on-year to 30.3% as a result of “a more diversified business mix and operating efficiency.”
While MGM China recorded an uptick for the six month period, analysts expressed concern over the Q2 results, which saw mass miss estimates.
“Mass (tables & slots) GGR dropped by -14% quarter-on-quarter (-1% year-on-year), underperformed the Macau Mass Market quarter-on-quarter growth of -2% (our estimate),” said brokerage Sanford C Bernstein. “VIP GGR showed weakness at MGM Macau on lower hold rate (though rolling chip volume was +3% year-on-year and +9% quarter-on-quarter). MGM lost share in both Mass and VIP during the quarter.
“We remain concerned about the company’s ability to fully defend its position over the next few quarters until the opening of MGM Cotai in Q4 along with a slow potential ramp up of MGM Cotai. With respect to Cotai, management guided to a Q4 opening, and emphasized the importance of capacity and bringing more tourists.”
In a statement, the company said, “MGM Macau continues to invest and focus on diversification. During the first half of 2017 we launched two new dining concepts at Square Eight, North and South, focusing on authentic regional Chinese cuisines.
“We opened the exhibition A Golden Way of Life – Tres’Ors, our 21st first-of-its-kind art exhibition at the MGM Art Space. We also launched M life, our new resort membership program to build rewarding relationships with our customers.”
MGM Macau, located on the Macau Peninsula, achieved an occupancy rate of 95.4% during the period with revenue per available room of HK$2,004.
The company also said it remains on track for a fourth quarter opening of its HK$26 billion MGM Cotai Integrated Resort, rumored to be in November. MGM China recently announced the dining program for MGM Cotai which includes four celebrity chefs – Mauro Colagreco, Mitsuharu Tsumura, Janice Wong, and Graham Elliot – along with a collection of regional Chinese specialty restaurants.
Chief Executive Officer and Executive Director of MGM China, Grant Bowie, said: “We are highly focused on the launch of MGM Cotai during the fourth quarter of this year.
“This HK$26 billion Integrated Resort will bring the future of entertainment to Macau today. With innovation throughout every customer offering, we are certain that MGM Cotai supports Macau as a global tourism destination.”
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