Mohegan Gaming and Entertainment is looking to the positives of expansion, construction and diversification, after its flagship Mohegan Sun endured a tricky quarter largely driven by temporary unfavourable hold.
Declines were partially offset by improved non-gaming revenue growth, including entertainment and hotel revenues, at the property, in addition to stronger corporate adjusted EBITDA aided by the inclusion of the recently acquired Niagara casino bundle, tighter expense management and improved financial performance at ilani Casino Resort.
Net revenue during the period increased less than one percentage point to $347.6m, income from operations decreased 13.6 per cent to $55.3m (2018: $63.9m) and adjusted EBITDA came in at $81.6m, representing a 7.5 per cent drop from $88.2m.
Mario Kontomerkos, president & chief executive officer, analysed the quarterly performance: “The June quarter was an important one in the evolution of MGE, as we closed on the acquisition of the Niagara casino bundle on June 11, including the impressive Fallsview Casino Resort – representing MGE’s latest international expansion and further earnings diversification.
“Continuing the trend, construction activity continues in Incheon, South Korea, setting ourselves up for our next landmark integrated resort opening in early 2022. Both markets will transform the earnings profile of the company.
“Domestically, volume trends across our portfolio remain inline to better than expected as overall gaming volumes at our flagship property, Mohegan Sun, remain robust despite the increased competitive pressure in the Northeast.
“Adjusting for unusually low table hold, overall MGE EBITDA would have been largely in line with our expectations, slightly up from last year’s comparable period, and well ahead of recent fiscal year 1Q19 and 2Q19 performance.
“Outside of Connecticut, EBITDA from Pocono grew, while corporate EBITDA turned positive given continued growth from our managed portfolio, including the first contribution from the Niagara assets and continued strong financial performance from ilani.”
Mohegan Sun revenues fell 19.3 per cent in Q2 to $251m (2018: $270.4m) driven by lower overall gaming revenues and unfavourable table hold during the period, which was partially offset by stronger non-gaming results which saw improvements “in nearly all segments of the business”.
It was a similar story at Mohegan Sun Pocono where a 2.8 per cent dip in revenue to $65.3m (2018: $68.2m) due to lower gaming revenues, reflecting lower table and slot revenues, offset marginally by better table hold in the period.
Kontomerkos recently spoke to CasinoBeats to find out what impact on the economy of Japan integrated resorts will have, why the company has thrown its hat into the ring and why an early Asian start in Korea could aid potential moves in the land of the rising sun.
