MGM China’s flagship Macau IR, MGM Cotai, will generate EBITDA of almost US$250 million once operating at full steam, according to a new report by ratings agency Fitch.
The report, issued Monday in the wake of news that MGM China’s parent company MGM Resorts International had agreed to sell two of its Las Vegas properties – the Bellagio and Circus Circus – paints a positive picture of the company’s Macau prospects.
In particular, it states that while the SAR looks set to record a slight year-on-year decline in gross gaming revenues in 2019, MGM China will gain market share as MGM Cotai, which opened in February 2018 and introduced VIP operations later that year, continues to ramp up.
“MGM Cotai will generate nearly US$250 million in incremental EBITDA once fully ramped,” Fitch said, adding that it expects MGM to be granted a new Macau gaming license once its current concession expires in 2022.
“Fitch expects the Macau government, placing a premium on stability, to take a pragmatic approach to extending MGM’s and others’ concessions beyond 2022; however, there is risk of adverse events or conditions such as a new concessionaire being introduced or new fees, taxes or development requirements being imposed.”
The agency said that it has a “favorable long-term view on Macau” which is “supported by an expanding middle class in China and infrastructure development in and around Macau.”
