MGM China Ltd’s Macau resorts, MGM Cotai and MGM Macau, have reached breakeven EBITDA levels and are pushing back into profit over the last two weeks of October, according to the company’s Chairperson and Executive Director, Bill Hornbuckle.
Providing a market update during MGM’s 3Q20 earnings call on Friday, Hornbuckle – who is also CEO and President of MGM China’s parent company MGM Resorts International – noted that visitation to Macau had shown steady improvement since the start of the month with improved volumes across all gaming segments each week through October.
“Month to date we are very encouraged that our properties have crossed property EBITDA breakeven levels, led by recovery in the premium segments,” he said.
“We expect the rate of recovery will continue to be gradual led by premium mass market which both our Macau properties are ideally positioned to capture.”
MGM China President and Chief Operating Officer Hubert Wang added that volume had naturally fallen in the week after the 1 October Golden Week holiday – itself described as “pretty strong” relatively speaking – but said, “I’m happy to report that the past couple of weeks we’ve seen some regrowth and that has generated enough GGR to be slightly above breakeven.”
MGM China revealed today an EBITDA loss of US$94 million for the three months to 30 September 2020 on a 93.7% decline in revenue, but Hornbuckle made it clear the company has no intention of pulling back on capex initiatives at its Macau properties.
The company has already begun construction of additional suites in the south tower of MGM Cotai which are due for completion in mid-2021, and is remodelling villas and level 35 gaming space at MGM Macau.
“Longer term we also have the ability and desire to build another hotel tower at MGM Cotai, along with meaningful entertainment options to diversify our offerings,” Hornbuckle said.