MGM China has posted an increase in net gaming revenues of 25 percent for the first quarter of 2018.
According to Inside Asian Gaming, the U.S. company’s flagship property, MGM Macau on the peninsula, was up 7.5 percent. MGM also got an assist from MGM Cotai, which opened February 13. The latter property kicked in HK$666.7 million (US$85 million) in net returns including HK$491.9 million in mass table win. Both VIP and mass turnover increased on the peninsula property, with VIP turnover up 23.6 percent for a win of HK$2.6 billion.
Analysts were upbeat about the results. “While MGM Macau’s mass GGR fell 9 percent quarter-on-quarter given weaker hold, its mass drop remained flattish despite a ~10 percent decline in mass tables, in turn suggesting the cannibalization from Cotai opening has been limited,” said JP Morgan’s DS Kim and Sean Zhuang.
“The VIP segment showed a similar trend (rolling -2 percent quarter-on-quarter versus the industry average of +4 percent), although this was probably due to the fact that Cotai currently has only direct VIP (no junkets),” the team wrote.
Morgan Stanley’s Praveen Choudhary, Jeremy An and Thomas Allen say the second half will improve with the introduction of junket operations. They called MGM “the most compelling stock in our coverage, with the highest projected EBITDA growth at 36 percent” for the second half.
“We are delighted to see another set of strong results of MGM Macau, demonstrating continuous customer loyalty to quality product and uncompromised focus on impeccable execution,” said MGM China CEO and Executive Director Grant Bowie. “The opening of MGM Cotai represents a milestone. The beautiful property is totally unique and a real game-changer for us as well as the market. We look forward to expanding and enhancing our offerings to provide spectacular experience for our guests, supporting our government’s vision to drive global tourism demand in Macau.”
Bowie added that junket operations will open at the Cotai resort “by the next Golden Week,” China’s October National Day holiday.
