MGM Resorts International has reported financial results for the fourth quarter and the full year of 2022. Net revenues for Q4 increased by 18% to $3.6 billion, while net revenues for the whole year amounted to $13.1 billion, an increase of 36% over the full year 2021. Officials said that a steady return of convention business, domestic leisure travel and encouraging results during the Lunar New Year at MGM China are set to drive “strong momentum” into the new year.
“We achieved our fifth consecutive quarter of record-breaking Las Vegas Strip resorts Adjusted Property EBITDAR in the fourth quarter,” said Bill Hornbuckle, CEO and President of MGM Resorts. “What we accomplished in 2022 is nothing short of remarkable, and is a testament to our strategic plan, scale, brand strength, talented team, loyalty program, and the diverse geographies and channels in which we operate.”
The Las Vegas-based giant reported a net income of $284 million, a loss of $1.53 per share, on revenue of $3.6 billion for Q4. In the same quarter one year ago, the company had a net income of $131 million, $2.77 a share, on revenue of $3.1 billion. Officials said income was affected by a $2 million loss in operating income attributed to the gaming subconcession process for Macau property MGM Grand Paradise, which was awarded another 10-year contract to operate in the gambling hub.
“In all my time with the company, I’ve never been more excited about our present and future than I am right now. I think we’re stronger, more agile, more focused and more determined than ever to win,” Hornbuckle told investors, as reported by Las Vegas Review-Journal. “We believe that there is strong momentum in our business and our 2023 outlook remains bright”
MGM CEO Bill Hornbuckle
The last quarter of 2022 benefited from the operating results of The Cosmopolitan of Las Vegas, which joined MGM Resorts’ portfolio in May 2022. It was also bolstered by the closure of The Mirage’s sale to Hard Rock International for $1.1 billion, which took place in December. Increased business volume and travel activity, mostly at the company’s Strip and regional properties, also added to the increased net revenues, according to management.
“We achieved exceptional results in the fourth quarter and remain optimistic in our outlook for this year. We are also focused on free cash flow and believe our company presents a compelling yield, especially when taking into account the value in our share price for excess cash, our ownership value of MGM China and BetMGM,” said Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts.
Halkyard further said MGM’s share buyback program repurchased about 80 million shares between 2022 and 2023, and totaling approximately $4.7 billion since 2021. MGM’s Board of Directors authorized a new $2 billion share repurchase program for the new year.
Strip hotel occupancy during the fourth quarter was 91%, up almost 6% when compared to a year earlier. Additionally, the average daily room rate rose 30% when compared to the same period, from $201 to $260. Executives attributed the growth to the portfolio’s luxury properties, including the likes of Bellagio, Aria and The Cosmopolitan. March is expected to bring in the company’s highest hotel revenue for one month, Hornbuckle said, as per Review-Journal.
MGM's Bellagio in Las Vegas
For the months ahead, the company is looking forward to the return of large conventions, and major sporting events including March Madness and the Formula One Grand Prix. A rebound in Macau could also be in place after January’s remarkable performance, boosted by the Chinese New Year holiday. MGM China’s combined properties were the highest-earning businesses within the company for the month, pushing its market share to 16%.
While MGM China was hit hard by pandemic-related restrictions in 2022, January saw a strong return of guests, with Hornbuckle telling investors that non-gaming entertainment – required by city authorities as part of the new Macau concession – helped drive tourism during the celebrations.
“Our room occupancy approached 100%, and our restaurant coverage actually exceeded 2019 Chinese New Year levels, and a lot of that was because of all these non-gaming events and concerts that drew a lot of incremental visitors to us,” Hubert Wang, president and chief operating officer of MGM China, said on the call, according to Review-Journal. “As we invest more in these non-gaming amenities, that’ll help with our market share growth down the road.”
Elsewhere in the call, and in response to inquiries from investors and analysts, Hornbuckle shot down rumors that the gaming giant intends to make a buyout offer for online gaming operator Entain. Hornbuckle said that while MGM remains focused on online sportsbook BetMGM, its joint venture with Entain, the company saw great potential in expanding LeoVegas, a Swedish online gaming company it purchased last year. Entain’s shares fell as much as 13% to a more-than-one-month low of 1365.5 pence in morning trade following the remarks.
Original article: https://www.yogonet.com/international/news/2023/02/09/66050-mgm-posts-revenue-up-36-to-13b-in-2022-officials-confident-strong-momentum-to-continue-in-2023
