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Howard Stutz

MGM Resorts increase revenues 51 percent in first quarter, but net loss also grows

3 May 2012

Accounting issues and the consolidation of full results from its Macau hotel-casino into the company's overall financial picture left MGM Resorts International with a large net loss for first quarter.

The casino operator said Thursday it lost $203.3 million in the period that ended March 31, compared with a loss of $89.8 million in the same quarter last year. The figures translated into a loss per share of 44 cents, compared to 18 cents per share in the 2011 first quarter.

However, with results from the MGM Grand Macau now part of the company's overall quarterly earnings, MGM Resorts said revenues grew 51 percent to $2.3 billion. Without the Macau casino, MGM Resorts said its overall revenues would have still increased 5 percent.

"We continue to see growth across our domestic business fundamentals with revenues, casino volumes, (revenue per available room) and adjusted cash flow all increasing year over year," MGM Resorts Chairman Jim Murren said in a statement.

MGM Resorts net loss included provisions for various taxes and loss for debt retirement.

On the Strip, MGM Resorts saw its net revenues increase 5.6 percent to $1.17 billion. At the Bellagio, net revenues increased 13 percent.

At CityCenter, which includes the Aria, net revenues declined $234 million compared with $263 million in the prior year quarter while adjusted cash flow fell to $32 million from $64 million.
MGM Resorts said Aria's table games hold percentage was significantly below the low end of its normal range, affecting what the company collected in gaming revenues. Aria's occupancy percentage was 86 percent and its average daily room rate was $205, resulting in revenue per available room of $177, a 3 percent increase compared to the prior year first quarter.

The MGM Grand Macau earned net revenue of $702 million, an 18 percent increase.

At the end of the quarter, MGM Resorts had approximately $13.4 billion of long-term debt.

KDP Investment Advisors gaming analyst Barbara Cappaert noted that MGM Resorts undertook a series of moves during the quarter, which extended the company's debt maturities.

"MGM's performance while better was still mixed in our minds," Cappaert said in a research note. "Not all properties are registering gains in cash flow which suggests to us that there could be a slowing in the recovery in Las Vegas. This is something to watch very closely."
MGM Resorts increase revenues 51 percent in first quarter, but net loss also grows is republished from