MGE opens up on an ‘important’ quarter in the evolution of the group

Mohegan Gaming and Entertainment has lauded “an important quarter in the evolution” of the group, with Las Vegas entry, key agreement in Connecticut, and crucial approval in South Korea all coming during the three months ending March 31, 2021.

In the US, the company also reports that its roster of properties have continued to demonstrate recovery, as the increased rate of vaccinations, coupled with easing of restrictions, bringing increased footfall.

The comments come as MGE detailed its performance throughout its second fiscal quarter of 2021, during which net revenue decreased 11.5 per cent to $278.6m (2020: $314.7m). Revenue across its gaming; food and beverage; hotel; and retail, entertainment, and other segments all recorded year-on-year declines.

Revenue as its flagship Mohegan Sun increased 6.7 per cent to $189m (2020: $182.2m), as overall visitation and gaming trends continued to improve sequentially as vaccination rates increased and customers returned to pre-COVID activity levels.

Mohegan Sun Pocono, which was closed for the first three days of January, saw revenue drop 1.4 per cent to $52.3m (2020: $53.1m), with the property said to have benefited from strong cost containment measures implemented over the course of the pandemic.

MGE Niagara Resorts plummeted 57.4 per cent to $13.8m (2020: $71.2m), reflecting the impact of the properties remaining temporarily closed for the three month period due to COVID-19 related measures implemented by the Ontario government.

Income from operations of $44.9m is contrasted to a loss of $106.3m recorded during 2020, primarily due to a $126.6m impairment charge at Mohegan Sun Pocono, with adjusted EBITDA up 57.3 per cent to $80.7m (2020: $51.3m).

“The March quarter was important in the evolution of MGE, as we opened the Mohegan Sun Casino at Virgin Hotels Las Vegas – representing MGE’s latest expansion and entry in the significant Las Vegas market,” said Raymond Pineault, interim CEO

“Continuing the trend of firsts, MGE, in partnership with the governor of the state of Connecticut and the Mashantucket Pequot Tribe, reached an agreement to allow online gaming and retail and mobile sports betting, which when approved by the Connecticut legislature, would expand MGE’s online footprint while providing further diversification to our business. 

“Additionally, late in the quarter, MGE’s Inspire project in Incheon, South Korea received an important approval from South Korea’s Ministry of Culture, Sports and Tourism, clearing the path to obtain financing for the project.”

The company’s second quarter results were against easier comparisons due to company-wide COVID-19 related property closures in the comparable prior-year quarter. 

When compared to the second quarter of 2019, consolidated net revenues declined 9.4 per cent and adjusted EBITDA increased 20.1 per cent, driven by reductions in operating costs and expenses, including lower payroll costs and marketing expenses.

Carol Anderson, chief financial officer of MGE, added: “In the United States, our properties have continued to recover, as the rate of vaccinations increases and states continue to ease some COVID-related restrictions. 

“At our flagship property Mohegan Sun, while revenues were below second quarter 2019 levels, which is the closest comparable due to property closures in the second quarter of 2020, adjusted EBITDA was $70m, 17.9 per cent favourable to the second quarter of 2019, while EBITDA margin was up 1,212 bps over the same period. 

“Outside of Connecticut, performance at ilani in Washington State continues to surpass expectations, while Mohegan Sun Pocono and Resorts are seeing positive sequential momentum. Finally, we look forward to reopening the MGE Niagara Resorts as soon as we are given approval from the government.”