Double-digit revenue gains in Macau helped the largest operator on the Las Vegas Strip narrow its loss in the fourth quarter.
MGM Macau, the casino controlled by MGM Resorts International (NYSE: MGM) through its 51% stake in MGM China Holdings (HKSE: 2282), generated US$925.8 million in revenue, an increase year on year of 27%. Main floor table games and slot revenues increased 18% and 4%, respectively, from a year earlier, both primarily because of strong increases in volume.
Corporate-wide results reflected the benefits of MGM’s presence in the only place in China where casinos are legal, along with the steady post-recession recovery of the Las Vegas Strip, where the company owns about a dozen casinos. Market-wide gaming revenue in Macau grew 24% in the fourth quarter to $12.5 billion, according to official figures. Revenue on the Las Vegas Strip rose 9% to $1.75 billion, according to data compiled by Bloomberg Industries.
MGM saw its revenue per available hotel room on the Strip rise 1.8% over the quarter, while occupancy dropped to 85% from 86% a year earlier. The average daily rate for the Strip resorts increased 2.3% to $133. In all, revenues at its wholly owned domestic resorts increased 1.2% to $1.48 billion. Corporate-wide revenues totaled $2.51 billion, a 9.5% increase over Q4 2012.
The results marked a third year of improvement in the company’s overall performance, but charges tied to its heavy debt load and asset write-downs continue to weigh on the bottom line. The company also has sold assets and refinanced a significant portion of its obligations since borrowing to buy and build massive complexes such as CityCenter on the Las Vegas Strip before the 2008 financial crisis. Long-term debt as of 30th September totaled $13 billion.
The bottom line for the 12 weeks ended 30th December was a loss of $38.3 million, or eight cents a share, compared with a year earlier, which ended in a loss of $1.22 billion, or $2.50 a share. The 2012 quarter included $2.27 in charges related to investment and land impairments, a loss on the retirement of debt and tax adjustments.
For Q4 2013, analysts polled by Thomson Reuters had forecast a loss of one cent per share on revenue of $2.46 billion.
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