MGM Resorts International reported a 6% increase in revenue from its Macau subsidiary, MGM China, to US$727 million in the three months to 31 December 2019, driven by increased table drop and a high win rate in the mass market segment.
Bolstered by the addition of 25 new-to-market gaming tables in early 2019 at MGM Cotai, the company saw mass table drop increase 3% to US$2.11 billion while a win rate of 24.0%, up from 19.0% in 4Q18, pushed mass table games win up 31% year-on-year to around US$505.2 million.
However, the VIP segment continued to struggle with volume down 23% to US$8.52 billion, including a 33% decline in VIP turnover at peninsula property MGM Macau.
MGM China reported a 10% increase in Adjusted Property EBITDAR to US$185 million, with Adjusted Property EBITDAR margin rising by one percentage point to 25.5% primarily as a result of continued ramp-up of operations at MGM Cotai.
In all, MGM’s two Macau properties contributed around 22.7% of group-wide revenue for the quarter, with MGM Resorts reporting a 4% increase in net revenues to US$3.2 billion.
In its results announcement, MGM also warned of a likely material impact on its 1Q20 financials due to the government’s decision to close all Macau gaming operations to limit the spread of the Coronavirus from mainland China.
“MGM Macau and MGM Cotai [has] suspended all operations at their properties other than operations that are necessary to provide sufficient non-gaming facilities to serve any remaining hotel guests,” MGM said.
“The Company is currently unable to predict the duration of the business disruption in Macau, if the suspension in operations will ultimately be continued beyond the 15-day period or the impact of the reduced customer traffic at the Company’s properties as a result, but we expect the impact could have a material effect on MGM China’s results of operations for the first quarter of 2020 and potentially thereafter.
“The extent to which the coronavirus impacts the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and any additional actions taken to contain it from spreading.”