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GM Resorts International has shared its third-quarter report. The gaming giant posted consolidated net revenues of $2.7 billion, an increase of 140% versus the prior-year quarter. The Q3 2020 was negatively affected by temporary closures at certain MGM Resorts properties due to the COVID-19 pandemic.
The casino operator also advanced its asset-light strategy, which Bill Hornbuckle, Chief Executive Officer and President of MGM Resorts International, says will allow MGM to simplify its corporate structure and bolster liquidity. The CEO also remains confident in the company’s long-term growth prospects, including BetMGM’s expanding footprint in the US, MGM’s selection as Osaka’s partner to build and operate a large-scale integrated resort, and the announcement of an agreement to acquire the operations of The Cosmopolitan of Vegas.
Under the Cosmopolitan agreement, MGM will acquire the operations of the venue for $1.6 billion and, at closing, the company will enter into a lease agreement for the real estate assets. The transaction is expected to close in the first half of 2022, subject to regulatory approvals and other customary closing conditions.
But now, MGM is also advancing its asset-light strategy by putting its Mirage in Las Vegas Strip property up for sale. The move was announced by Hornbuckle at a call with investors on Wednesday. “As we look at capital allocation, and we looked at the notion of diversification, we have enough of Las Vegas,” the CEO commented.
According to him, MGM is content with the amount of exposure it currently has in Vegas, and is now in “the early stages” of the process of selling the Mirage operators. No potential buyers have been named yet.
The underlying real estate of the Mirage is owned by MGM Growth Properties, which is being bought by Vici Properties in a $17.2 billion deal announced in August, expected to close in the first half of 2022. However, MGM Resorts still owns the operations of the resort: this is what the company is looking to sell.
“We delivered another strong quarter led by our domestic operations resulting in new historical Adjusted Property EBITDAR records for our Las Vegas Strip and U.S. regional segments,” said Hornbuckle. “These results demonstrate the continued robust demand for our gaming entertainment offerings across the U.S. and the effectiveness of our operating model.”
“Our strong liquidity position, coupled with our confidence in the long-term recovery of our core business, has allowed us to continue to focus on maximizing long-term shareholder value,” said Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts International. “To that end, we continued to repurchase our stock in the third quarter, reaching over $1 billion of share repurchases since beginning the program this year.”
Consolidated operating income was $1.9 billion, compared to a consolidated operating loss of $495 million in the prior-year quarter. Net income attributable to MGM Resorts was $1.4 billion, versus a net loss attributable to the company of $535 million in Q3 2020.
The gaming giant posted an EBITDAR increase of 21% and 29%, respectively, for its Las Vegas Strip resorts and its regional operations; and posted record regional operations adjusted property EBITDAR margins during the period.
Consolidated cash and cash equivalents balance as of September was $5.6 billion, including $320 million at the MGP Operating Partnership, and $331 million at MGM China. Total liquidity at September 30, 2021 was $9.8 billion, which included $1.7 billion at the MGP Operating Partnership and $1.7 billion at MGM China.
On the individual markets, Las Vegas Strip Resorts saw net revenues of $1.4 billion, up 187% versus 2020, while still 8% down compared to 2019. Regional operations posted net revenues of $925 million, up 66% from the prior-year quarter, while down just 1% versus 2019. While MGM China also increased against 2019 (up 517%), it was notably down compared to the third quarter of 2019: it saw a decrease of 61%.
Original article: https://www.yogonet.com/international//noticias/2021/11/04/60057-mgm-to-sell-the-mirage-on-las-vegas-strip
