MGM Resorts International has flagged a 63% year-on-year decline in revenues to US$272 million for its Macau subsidiary, MGM China, in the three months to 31 March 2020.
The preliminary results were included in a prospectus issued overnight after MGM Resorts announced a US$500 million bond offering, later upsized to US$750 million, aimed at further increasing the company’s liquidity position in the face of COVID-19.
While full 1Q20 results won’t be released until late next week, MGM provided some details early including an expected 63% fall in revenues and 88.6% decline in Adjusted Property EBITDAR to US$22 million for MGM China.
It also revealed daily cash operating expenses for its Macau properties – MGM Cotai and MGM Macau – are US$1.5 million per day, “significantly in excess of amounts being earned at those properties.”
“Several travel and entry restrictions in Macau, Hong Kong and certain cities and regions in mainland China remain in place … significantly impacting visitation to our Macau properties, which continue to have a material impact on MGM China’s results of operations,” MGM said.
Largely on the back of MGM China, MGM Resorts’ group-wide net revenue declined by around 29% to US$2.3 billion and Adjusted EBITDAR by 61% to US$295 million in 1Q20, although operating income increased from US$370 million to US$1.3 billion due to the recent MGM Grand Las Vegas/Mandalay Bay real estate transactions.
MGM Resorts said its operating expenses, excluding MGM China and MGM Growth Properties, is currently around US$270 million per month but noted it has cash and cash equivalents as at 31 March 2020 of US$6.0 billion, including US$381 million at MGM China.