MGM China Reports 9% Revenue Drop in 1Q2022 Due to Travel Restrictions

The top developer and operator of gaming venues and resorts in the Greater China region MGM China Holdings Limited (MGM China) have reported its Q122 results. According to data provided by its parent company MGM Resorts International, MGM China recorded a revenue of $268 million in the first quarter of the year that ended on March 31. The number represented a 9% year-on-year decrease compared to the same period of 2021.

The revenue was also 63% lower compared to the first quarter of 2019 and 15% lower compared to the fourth quarter of 2021. The explanation for the revenue drop is attributed to the ongoing entry and travel restrictions imposed on the company’s Macau properties, MGM Macau and MGM Cotai.

MGM China Also Recorded a Drop-in EBITDAR

The earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) also recorded a $26 million decrease compared to $5 million in the first quarter of 2021 and $11 million in the fourth quarter of 2021. The company mentioned a litigation reserve charge of $18 million in the context of its potential junket-related debts following the collapse of the junket industry in Macau in the past few months. The company recorded a turnover drop of 45% to $963 million for VIP table games on a quarter-on-quarter basis. The win also went down 55%, reaching $23 million, while the main floor table games decrease was 6% compared to the fourth quarter of 2021.

MGM Macau Did Better Than the Cotai Location

MGM Macau’s wins generated by its main floor table games reached $136.3 million compared to $101.7 million for MGM Cotai. Macau’s slot machine win of $16.8 million versus was double the $7.9 million win recorded by MGM Cotai.

However, MGM China’s first-quarter results were in complete opposition to the group’s consolidated results which reached $2.9 billion in 2022 compared to $1.6 billion in 2021. The impressive increase was mostly triggered by the acquisition of Aria in July 2021. The group’s net loss was $18 million, compared to $332 million in the first quarter of 2021. The group’s Las Vegas YoY revenues went up 205%, reaching $1.7 billion, while the Adjusted Property EBITDAR saw a massive rise of 449% to $594 million. The results come after the company announced its plans to recover and capture market rebound with the help of previous junket customers and a massive relocation of resources in February.