MGM China Ltd has seen its revenue rise 23% year-on-year and 7% sequentially to US$734 million in the three months to 31 March 2019, buoyed by a full quarter of operations at MGM Cotai, the addition of new gaming tables and improved main gaming floor win rates.
Ongoing ramp at its flagship Cotai property, which opened in February 2018, saw Adjusted Property EBITDA grow 26% to US$191 million, compared to US$152 million in the prior year quarter, and Adjusted Property EBITDA margin up from 25.5% to 26.0%.
Despite MGM Cotai adding junket rooms in the second half of 2018, it was the mass market segment contributing most of the growth for MGM China, including a 16% year-on-year increase in mass table drop to US$1.99 billion. A win rate of 22.3% pushed main floor table games win to US$444.4 million, up 35% on 1Q18 numbers, while the addition of 25 new-to-market gaming tables on 1 January 2019 contributed net revenue of US$301 million, MGM China said.
VIP rolling chip grew 1% across MGM’s two Macau properties to US$10.01 billion, with win rate holding steady year-on-year. However, the company says it is confident the segment will show improvement in the future following the launch of its ultra-luxury Mansion VIP enclave at MGM Cotai in late March. MGM noted that 80% of its gaming profit in 1Q19 came from the mass market.
Parent company MGM Resorts, which holds a 56% stake in MGM China, saw its net revenue rise 13% to US$3.2 billion and Consolidated Adjusted EBITDA up 5% to US$740 million. However, net income fell from US$223 million to US$31 million due to various tax charges including the extension of its Macau sub-concession until 2022.
Chairman and CEO Jim Murren highlighted the company’s new MGM 2020 business optimization initiative during an investor presentation, with MGM Resorts targeting consolidated Adjusted EBITDA of between US$3.6 billion and US$3.9 billion by 2020.
