MGM Resorts’ third-quarter earnings took a hit due to the effects of the pandemic.
MGM, a leading force in Macau’s gaming sector, unveiled its Q3 2022 financial report, showing earnings of $241.8 million (£210.6 million/€244.6 million), a 45.8% drop from the same period last year. This decline is a direct result of the ongoing impact of the COVID-19 pandemic.
MGM’s third-quarter earnings continued to fall.
MGM Chairman and CEO, Pansy Ho, stated that despite the difficult operating conditions, there were some positive signs, including a rise in visitor figures towards the end of the quarter.
Ho explained: “In July, the Macau government implemented pandemic control measures that resulted in the closure of our casinos for 12 days.”
“Following the reopening, the operating environment remained challenging due to strict travel regulations, but we are hopeful about Macau’s recent opening of international travel to specific countries and regions, as well as the increase in visitor numbers during the Golden Week in October.”
Ho also addressed the ongoing public bidding process for gaming licenses, where six operators in Macau will be granted licenses. MGM is one of seven applicants, meaning one will be excluded.
She added: “We submitted our proposal for the new gaming concession public tender on September 14, 2022, which is a transparent and open process.”
We wholeheartedly endorse the Macau administration’s strategy to further elevate Macau as the leading international travel destination in Asia.
Our proposed suggestions once again illustrate our dedication to Macau, and we anticipate playing a pivotal role in collaborating with the Macau government to achieve its vision.
The majority of operating income originated from casinos, reaching $181.9 million. However, this represents less than half of the $373.1 million in casino income from the previous year. Hotel room income amounted to $25.9 million, a decline of 22.2%, and food and beverage income also decreased from $20.5 million to $17.9 million. The remaining income stemmed from entertainment, retail, and other ventures, totaling $15.9 million.
MGM’s Macau Cotai resort contributed $66.4 million to overall revenue in the quarter, while the Manila Cotai resort generated $102.6 million. Its Mocha Clubs (a collection of smaller gaming venues) produced $18.8 million in revenue, and the business received $2.4 million from Macau Altira. Studio City generated $25.6 million in revenue. Meanwhile, MGM’s entire operations in Cyprus accounted for $24.8 million in revenue.
Total expenses amounted to $440.3 million. While this represented a reduction of 29.9% from the cost recorded in the third quarter of 2021, the decrease was insufficient to prevent the expansion of the net loss – $198.5 million, compared to $182.2 million a year prior.
Casino operations were the primary cost driver, reaching $173.8 million. This was followed by depreciation and amortization expenses of $113.5 million, and general and administrative expenses totaling $98.8 million.
The firms deficit climbed to $284.5 million after factoring in interest and funding expenses. This figure reflects a 2.5% rise compared to the same time frame last year.
After subtracting $2 million in levies, the total net deficit reached $286.6 million, a 6.7% increase year-on-year.
Total income for the initial nine months of the year was $1.01 billion, down 33.8% year-on-year. Expenditures were $1.55 billion, resulting in an operating profit of $543.6 million. After deducting interest, taxes, and other expenses, the total net loss for the period was $803.1 million.
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