Casino giant MGM Resorts International reported a US$1.22 billion net loss in the fourth quarter on impairment charges as revenue corporate-wide was flat year on year at $2.3 billion.
But there was good news for shareholders of the company’s Hong Kong-listed Macau operator, MGM China Holdings, which will pay a special dividend of US$500 million. MGM owns 51% of the company, entitling it to $255 million of the disbursement.
The company also announced that it will hold a formal ground breaking ceremony for its Cotai project on 27th February.
“I expect MGM China will be able to continue to pay distributions to shareholders while investing in its second property in Cotai,” said MGM Resorts Chairman and CEO James Murren, who added that the board was considering instituting a regular dividend.
MGM China generates about 32 percent of MGM Resorts’ total revenues.
The loss declared by MGM Resorts amounts to US$2.50 per share, up from 23 cents a year ago. Excluding the charges—most of which relate to a land sale in Atlantic City, a write-down of the company’s investment in The Borgata in Atlantic City and the refinancing of $5 billion in corporate debt—the loss was 23 cents per share, in line with analysts’ expectations of a loss of 22 cents.
MGM China saw net revenue rise 2% in the quarter to HK$5.66 billion (US$725 million), down from +26% in 2012. EBITDA was flat at HK$1.37 billion. VIP volume was up 6%, but lower hold relative to the same period last year left revenue down 6%. Mass-market revenue was up a 36% on a 13% increase in drop. Slot handle was up 37%.
“In our view, MGM Macau continues to punch above its weight, especially relative to its peers on the Macau peninsula,” wrote Union Gaming Research Macau in a note to investors today. “We remain optimistic about the Macau market in general and MGM China in specific as we believe 2013 will be another solid year for Macau, driven by robust mass market and slots trends, as well as an uptick in VIP.”
RelatedPosts
