MGM Resorts International has celebrated new record highs for its Las Vegas Strip Resorts and MGM China properties in its latest financial report.
Las Vegas Strip Resorts achieved record full year and fourth quarter net revenue and Adjusted Property EBITDAR, while MGM China reported a new high adjusted property EBITDAR across Q4 and 2023.
MGM Resorts Q4 & 2023 results
Publishing its financial results, MGM Resorts declared consolidated net revenue for Q4 of $4.4bn, up 22 per cent year-over-year (Q4 2022: $3.6bn).
Casino revenue during the quarter rose to $2.2bn (Q4 2022: $1.5bn), followed by rooms at $1bn (Q4 2022: $897.9m), food and beverage at $727.9m (Q4 2022: $710.6m) and entertainment, retail and other at $422m (Q4 2022: $421.7m).
The operator attributed the overall rise to revenue improvement at MGM China following the end of COVID-19-related entry restrictions in Macau, offsetting casino revenue decreases in Regional Operations and the dispositions of The Mirage and Gold Strike Tunica.
Operating income for the quarter was $419m, an increase on the operating loss of $2m in the prior year quarter due to a net revenue uptick and a “decrease in amortization expense of $1.2bn relating to the MGM Grand Paradise gaming subconcession, partially offset by a $1.1bn gain on the disposition of The Mirage in the prior year quarter”.
Net income came in at $313m (Q4 2022: $284m) while consolidated adjusted EBITDAR was $1.2bn.
For the full year, MGM Resorts reported consolidated net revenue of $16.2bn, up 23 per cent YoY (2022: $13.1bn), with casino revenue coming in at $8.1bn (2022: $5.7bn), rooms at $3.5bn (2022: $3.1bn), food and beverage at $2.9bn (2022: $2.6bn) and entertainment, retail and other at $1.6bn (2022: $1.7bn).
2023 net revenue rose “due primarily to an increase in revenue at MGM China and an increase in non-gaming revenues at Las Vegas Strip Resorts, partially offset by a decrease in casino revenue at our Regional Operations”.
In addition, the operator noted that the full year included “operating results of The Cosmopolitan subsequent to its acquisition in May 2022 and the results of Gold Strike Tunica until its disposition in February 2023, and excludes the results of The Mirage due to its disposition in December 2022”.
“Our Las Vegas Strip Resorts and MGM China set new all-time records for full year and fourth quarter Adjusted Property EBITDAR.”
MGM Resorts CEO and President Bill Hornbuckle
Operating income for the full year stood at $1.9bn, up in comparison to $1.4bn recorded in 2022 due to net revenue increases plus “a $2.5bn decrease in noncash amortization expense relating to the MGM Grand Paradise gaming subconcession and a $399m gain on the disposition of Gold Strike Tunica in the current year”.
However, these gains were partially offset by “the $2.3bn gain on REIT transactions, net, and the $1.1bn gain on the disposition of The Mirage in the prior year, as well as a current year increase in rent expense of $313m primarily related to the VICI and The Cosmopolitan leases, which commenced in April 2022 and May 2022 respectively”.
2023 net income came in at $1.1bn (2022: $1.5bn) while consolidated adjusted EBITDAR stood at $4.6bn.
For the 12 months ended December 31, 2023, net cash flow provided by (used in) operating, investing and financing activities was $2.7bn, ($714m), and ($5bn) respectively, while free cash flow was $1.8bn.
Reflecting on the Q4 and 2023, MGM Resorts CEO and President Bill Hornbuckle praised the record results in Las Vegas Strip Resorts and MGM China, while also highlighting that 2024 has already begun strongly for the operator.
“Our Las Vegas Strip Resorts and MGM China set new all-time records for full year and fourth quarter Adjusted Property EBITDAR,” said Hornbuckle.
“Our premium positioning and offerings in Las Vegas enable us to capture incremental profit during major events such as the inaugural Formula One race and our first Super Bowl. 2024 is off to a winning start with the launch of our Marriott relationship as well as opportunities to increase our convention room nights and international mix.”
MGM China improvement
As previously mentioned, MGM China operations improved significantly YoY in Q4 due to the removal of COVID restrictions in Macau, as well as increased visitation and authorised tables.
MGM China’s net revenue came in at $983m improved by 462 per cent YoY (Q4 2022: $175m) as well as 35 per cent against 2019’s Q4 figures. For the full year, net revenue stood at $3.2bn, up 368 per cent YoY (2022: $674m) and nine per cent against 2019’s numbers.
Q4 adjusted property EBITDAR was $262m (Q4 2022: adjusted property EBITDAR loss of $55m) with a margin of 26.7 per cent. Q4 2022’s figures were also a 42 per cent increase on Q4 2019’s figures.
For the full year, adjusted property EBITDAR was $867m (2022: adjusted property EBITDAR loss of $203m) with a margin of 27.5 per cent. 2023’s figures were also an 18 per cent improvement on 2019’s numbers.
Kenneth Feng, President and Executive Director of MGM China, said: “We are excited about the recovery in Macau and our outperformance across various business segments.
“We will continue to innovate our products and services to enhance customer experience. We are also committed to bringing in more unique integrated tourism experiences to attract international visitors.”
F1 race boosts Las Vegas
At Las Vegas Strip Resorts, records were achieved during Q4 thanks to the Formula One Grand Prix taking place in the city, which produced the “highest hotel generating event ever”. MGM added that its properties are “well-positioned to fully benefit from tent pole Las Vegas events”.
Las Vegas Strip Resorts Q4 net revenues came in at $2.37bn, up three per cent YoY (Q4 2022: $2.3bn), while for the full year, net revenue stood at $8.8bn, a five per cent increase in comparison to 2022’s $8.4bn.
Net revenue rose during Q4 following “an increase in ADR, partially due to Formula 1 and an increase in casino revenues that benefited from a higher win percentage, partially offset by the disposition of The Mirage”.
Q4 adjusted property EBITDAR fell by one per cent to $864m (Q4 2022: $877m) with a margin of 36.5 per cent (Q4 2022: 38.2 per cent). For the full year, adjusted property EBITDAR rose by two per cent on the full year to $3.2bn (2022: $3.1bn) with a margin of 36.3 per cent (2022: 37.4 per cent).
For Regional Operations, Q4 net revenue fell by 12 per cent to $873m (Q4 2022: $991m), while 2023 also declined by four per cent to $3.7bn (2022: $3.8bn).
Revenue fell during Q4 due to casino revenue being impacted by casino revenue decreases “partially attributable to the effects of the union strike at MGM Grand Detroit and a decrease in high-end table volume at MGM National Harbor, as well as due to the disposition of Gold Strike Tunica”.
Q4 adjusted property EBITDAR was down by 27 per cent to $233m (Q4 2022: $320m) with a margin of 26.7 per cent (Q4 2022: 32.2 per cent). For the full year, adjusted property EBITDAR fell by six per cent to $1.1bn (2022: $1.3bn) with a margin of 30.9 per cent (2022: 33.9 per cent).
CFO and Treasurer Jonathan Halkyard noted: “Yesterday, we closed on an amendment and extension to our senior secured credit facility, providing us with $610m in additional capacity and extending the maturity by over two years to 2029.
“We continue to see great value in our shares and are returning capital to shareholders by repurchasing our shares. We have already bought back approximately six million shares for an estimated $249m year-to-date, adding to the approximate 54 million shares that we repurchased in 2023, totalling $7.1bn of repurchases since 2021.”
Last week, BetMGM published a trading update where CEO Adam Greenblatt stated that the operator can focus on player acquisition and retention, as well as strengthen its market position, following strong organic growth in 2023.
