MGM recovery gains steam as the loss decreases. The CEO sees a strong demand for recreation to come.


MGM’s CEO expects strong demand for recreation this spring and summer as the pandemic subsides.

Ethan Miller / Getty Images

Text size

Things are looking for

MGM Resorts International.

The casino operator on Wednesday reported a smaller loss in the first three months of 2021 than in each of its previous three quarters, aided by improving leisure activities in Las Vegas and regional gaming markets sustainable as the pandemic abates.

The Las Vegas-based company lost 68 adjusted cents per share in the quarter, down from a loss of 45 cents a year earlier, as consolidated net income fell 27% year-on-year to 1.6 billion dollars.

“In Las Vegas and at our regional properties, our initial recovery was strong,” CEO Bill Hornbuckle told analysts on the first quarter conference call Wednesday night. “It was great to see Las Vegas come back to life in the vibrant destination we have all come to know and love.”

Although it has a portfolio of regional properties and a relatively small operation in China,

MGM Resorts International

(ticker: MGM) is perhaps best known for some of its signature properties on the Las Vegas Strip such as the Bellagio, Mandalay Bay, and New York-New York.

Looking ahead, Hornbuckle said he expects “strong demand for recreation throughout the spring and summer with hotel occupancy rates of around 90% on weekends. . “

The first quarter room occupancy rate for properties on the Las Vegas Strip was 46%, compared to 38% in the fourth quarter. The occupancy rate in March was 62%. “Our occupancy rate on the Las Vegas Strip last weekend was around 73%,” CFO Jonathan Halkyard said.

However, weekday business, which relies heavily on meetings and conventions as well as group activities, continues to plummet due to the pandemic. But there are signs of improvement. World of Concrete, a major trade show typically held in January, plans to hold its trade show in June at the Las Vegas Convention Center.

Hornbuckle said that with larger groups expected to return “to large scale,” or to normal levels, in 2022, “our activities in 22 and 23 are in line with pre-Covid levels.”

The stock was at $ 43 and is trading on Thursday morning, up about 2% in pre-market trading. Stocks have gained over 30% this year.

Meanwhile, the company’s resorts on the Las Vegas Strip reported first-quarter net sales of $ 545 million, down 52% from the previous year. The company attributed this to the pandemic “and associated operational restrictions, as well as mid-week property and hotel closures at some properties.”

Adjusted real estate income before interest, taxes, depreciation, amortization and rent was $ 108 million, compared to $ 268 million in the first quarter of 2020.

The company’s regional properties, meanwhile, generated net income of $ 711 million, down just 2% year-over-year. Regional casinos are much less reliant on air travelers and tend to serve the needs of players better.

The company said it expects airlift capacity in Las Vegas to be 93% of pre-pandemic levels in June and 99% in July.

“We expect, at least the airlift, to be pretty close to what it was in previous years,” COO Sanders said.

JPMorgan analyst Joseph Greff observed in a research note that “this airlift support bodes well for the group’s return to business, which along with what is on MGM’s books for 2022 and 2023, are at pre-pandemic levels.

International travel, however, remains weak.

BetMGM, the company’s online / mobile platform for gaming and sports betting, gained market share in the first quarter, according to Halkyard.

Write to Lawrence C. Strauss at [email protected]


About Author

Comments are closed.