MGM Resorts International has stressed pride at progress made during 2019, as the group withdraws full year financial targets for the current year due to the unpredictability of several headwinds expected.
Releasing its latest financial report, revenue for the quarter finished four per cent ahead at $3.18bn (2018: $3.05m), helping push full-year figures to $12.9bn, a ten per cent increase year-on-year from $11.8bn.
Consolidated operating income for Q4 saw a significant upturn from $336m to $3bn, including a $2.7bn gain related to the Bellagio real estate transaction. The sale also saw net income swing from a $23m loss to $2bn.
Consolidated adjusted EBITDAR decreased three per cent to $682m in the current quarter compared to $703m, primarily attributable to a drop in table games revenues attributable to Far East baccarat at the company’s domestic resorts and the inclusion of $24m in insurance proceeds in the prior year.
Revenue at MGM’s Las Vegas Strip resorts saw a Q4 boost of four per cent to $1.42bn (2018: $1.37bn), with a slight two per cent rise felt for the year from $5.71bn to $5.83m.
Regional operations soared 15 per cent during the quarter to $899.6m (2018: $782.3m), while on a yearly basis, including input from the Empire City Casino and MGM Northfield Park acquired properties and a full year of operations at MGM Springfield, a 21 per cent increase to $3.54bn (2018: $2.93bn) was reported.
MGM China contributed revenue of $727m in Q4, a six per cent rise from $686.7m, aiding a 19 per cent increase for the year to $2.9bn (2018: $2.44bn).
Jim Murren, chairman and CEO of MGM Resorts, who is to depart his role at the end of the current contract, explained: “During the year, our team made meaningful strides in implementing our asset-light strategy to optimise our portfolio, strengthen our balance sheet and enhance free cash flow. This strategy is best positioning MGM Resorts for the future by providing the flexibility to invest in higher return growth opportunities.
“Following the monetisation of the real estate of Bellagio and the sale of Circus Circus Las Vegas, we continued our momentum into the first quarter of 2020 with our announcement to monetise the real estate of MGM Grand Las Vegas.
“Our previously announced transactions are expected to provide total net cash proceeds to MGM Resorts of $8.2bn, a portion of which we used to retire $3.1bn of debt in the fourth quarter.”
Furthermore, MGM also emphasises that due to increased volatility due to coronavirus, which sees its Macau casino currently closed, as well as the market-wide weakness in Far East baccarat in Las Vegas, 2020 full year financial targets have been withdrawn.
“We have made significant changes as a company since 2018, when we announced our financial targets. We have advanced our transition to a more asset light business model and are successfully continuing to execute on our MGM 2020 plan,” said Corey Sanders, chief financial officer and treasurer of MGM Resorts.
“While we are encouraged with the long-term outlook in most of our key segments, and are especially pleased with our underlying domestic business performance, we believe it is appropriate to withdraw our 2020 financial targets.”