EBITDA positive MTD in Oct at MGM China venues: parent

EBITDA positive MTD in Oct at MGM China venues: parent

Bill Hornbuckle, chief executive and president of U.S.-based casino operator MGM Resorts International, says the company has seen in the third quarter “sequential improvements” in all of the markets where it operates. The group’s two Macau properties have seen positive earnings before interest, taxation, depreciation and amortisation (EBITDA) month-do-date in October, he added.

Mr Hornbuckle (pictured in a file photo) made his comments on Thursday during a conference call with investment analysts following MGM Resorts third-quarter results’ announcement.

MGM Resorts is the parent company of Macau-based casino firm MGM China Holdings Ltd. The Macau unit runs the MGM Macau resort in downtown Macau, and MGM Cotai in the city’s Cotai district.

“Since the second week of the month [October] we have seen improved volumes across all segments sequentially week-on-week,” stated Mr Hornbuckle. “Month-to-date, we are encouraged that our properties have crossed property-EBITDA break-even levels, led by the recovery in the premium segments.”

He added: “We expect the rate of recovery will continue to be gradual, led by the premium-mass segment, which both of our Macau properties are ideally positioned to capture.”

Hubert Wang, president and chief operating officer of MGM China, said on the call that gaming volumes at the Macau properties fell slightly following the Golden Week holiday period at the beginning of October. But the executive said the company saw some increase in volumes “in the past weeks,” which “generated enough GGR [gross gaming revenue] to allows us to be slightly above break-even [EBITDA levels].”

Mr Wang said additionally that the company “hadn’t seen a lot of changes” regarding liquidity in the Macau market, nor a “material impact” on the firm’s business.

During the call, Mr Hornbuckle said “logistical hurdles and testing requirements” related to countermeasures against Covid-19 “continued to impact the Macau market”.

Despite the negative effects wrought by the pandemic, the company was still investing in Macau, noted the CEO.

He said: “Currently, construction of additional suites … at MGM Cotai is underway and will be done in mid-2021. We’ve also began remodelling our MGM Macau villas and the gaming space on level 35, and in both properties, we are also adding food and beverage options focused on the gaming floors.”

Mr Hornbuckle was also asked about the future of Macau gaming rights, as the current six licences are due to expire in June 2022. The executive said there was now a “great deal of pressure” from Macau’s Legislative Assembly “to have the [city’s] Chief Executive come out and begin the process.”

“To date, they [the Macau government] seem to be saying that they are on track” for a public tender ahead of the expiry date in June 2022, he said. “They’ve got to give six months’ notice, so 2021 will be very active, unless they delay it a year. Given what has happened with Covid[-19], I think they could, but they seem to be on track.”

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