MGM Resorts International on Monday reported it had narrowed losses in the first quarter of 2022 as it prepares to buy The Cosmopolitan of Las Vegas and sell The Mirage.
The company in September announced plans to acquire the operations of The Cosmopolitan from Blackstone Group for $1.63 billion. Three months later, MGM and Hard Rock International announced they had struck a deal for Hard Rock to buy The Mirage for $1.08 billion.
The Mirage transaction is scheduled to be reviewed Wednesday by the Nevada Gaming Control Board.
Also Monday, MGM reported plans to buy LeoVegas, a Swedish mobile gaming company that is expected to boost the company’s efforts to expand its international online gaming, for $607 million.
“Our midweek business is improving with each quarter and our group base is growing after a tough January,” MGM President and CEO Bill Hornbuckle said in an earnings press release. “The results demonstrate the robust demand for our gaming entertainment offerings with the backdrop of increased sports and entertainment programming in the Las Vegas market. We reached another milestone in the completion of our asset-light strategy with the closing of the Vici transaction, allowing us to simplify our corporate structure and bolster our liquidity while deploying capital into growth projects with the highest shareholder return.”
Vici, a real estate investment trust affiliated with Caesars Entertainment Inc., acquired MGM Growth Properties for $17.2 billion in a deal that closed Friday.
MGM reported a net loss of $18 million, 6 cents a share, on revenue of $2.85 billion for the quarter that ended March 31. In the same quarter a year earlier, MGM had a net loss of $331.8 million, 69 cents a share, on revenue of $1.65 billion.
Hornbuckle explained that domestic casino and hotel revenue — particularly from Las Vegas — helped offset a weak performance from the company’s MGM China division operating in Macao.
He said Las Vegas results in January slumped as a result of a surge in the omicron variant of COVID-19, but business picked up in February and March.
Casino revenue more than doubled in Las Vegas for the quarter, from $232 million to $475 million, with table game drop — the amount wagered — climbing from $529 million to $1.2 billion and slot machine handle increasing from $2.3 billion in 2021 to $4.61 billion this year.
The casino’s win percentage improved from 24.1 percent to 24.6 percent on table games and 9.2 percent to 9.3 percent on slots. That resulted in table game win of $296 million from $127 million in 2021, and $427 million from $212 million in 2021 on slots.
Hotel room revenue was also robust for MGM in Las Vegas.
The company reported hotel revenue of $485 million this year compared with $144 million in 2021. The hotel occupancy rate for the first quarter this year was 78 percent compared with 46 percent in the first quarter of 2021. The average daily room rate soared from $129 a night in 2021 to $197 a night this year.
The company’s other domestic U.S. hotel-casinos had upticks from last year’s first quarter, but not as strong as in Las Vegas.
Its regional operations reported gaming revenue of $704 million, up 18 percent from $597 million reported in 2021.
The table game win percentage stayed the same at 21.2 percent year-over-year, but the slot machine winning percentage dropped from 9.8 percent to 9.6 percent for the quarter.
At the company’s two properties in Macao, casino revenue fell 12 percent from $262 million in 2021 to $231 million this year.
Macao produced net revenue of $268 million for MGM, which has a 50-50 partnership there. The revenue decline, impacted by travel and entry restrictions in the region, was 9 percent from 2021 and a 63 percent drop from the pre-pandemic 2019 first quarter.
“Our strong liquidity position, coupled with our confidence in the long-term recovery of our core business, has allowed us to continue to focus on maximizing long-term shareholder value,” Chief Financial Officer and Treasurer Jonathan Halkyard said in a release.
“To that end, we continued to repurchase our stock in the first quarter, reaching over $1 billion during the first quarter of 2022 and we repaid $1 billion of notes in March,” he said. “We are disciplined in our approach to capital deployment and are focused on maintaining a strong balance sheet with adequate liquidity, while at the same time pursuing growth opportunities with the greatest return to shareholders.”
The company’s board of directors also approved a quarterly dividend of 0.0025 cents per share, payable June 15 to shareholders of record on June 10.
This is a developing story. Check back for updates.
Contact Richard N. Velotta at firstname.lastname@example.org or 702-477-3893. Follow @RickVelotta on Twitter.