MGM Resorts International, the Las Vegas-based global gaming and entertainment giant, today reported financial results for the first quarter of 2023. The company generated $3.9 billion in net revenues by March 31, 2023, which is a 36% increase in comparison to the same period last year. Other results, such as the $467 million net income over the last year’s loss of $ 18 million, are more than promising for the operator.
According to the company’s web page, Bill Hornbuckle, Chief Executive Officer, and President of MGM Resorts commented: “MGM Resorts is executing across all of its geographies and channels with record first quarter Las Vegas Strip Adjusted Property EBITDAR, consistently strong Regional Operations profit, MGM China’s swift return to profitability, and BetMGM’s anticipated positive earnings later this year.”
Hornbuckle also said: “Beyond our continued exceptional results, our future growth and expansion plans are promising. In April, we achieved the landmark approval of MGM’s development plan in Osaka, Japan. The application process in New York is progressing and our global digital expansion plans remain a major focus as we continue to grow LeoVegas and the MGM digital brand worldwide.”
Improved Balance Sheet:
Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts added: “MGM Resorts achieved net cash flow provided by operating activities of $704 million and Free Cash Flow of $564 million during the first quarter.” Halkyard also said that the company’s balance sheet continues to improve as MGM received $450 million in gross cash proceeds from the sale of the Gold Strike Tunica resort and repaid the $1.25 billion debt during the quarter.
According to Halkyard, MGM Resorts now have $4.5 billion of cash on the balance sheet. He asserted that these assets will provide the capital return to shareholders and the financial base which will facilitate continued stock repurchases and long-term growth through international acquisitions and the projected developments in Japan and New York.
36% Revenue Increase:
MGM closed the first quarter of 2023 with net revenues of $3.9 billion which represents a 36% y-o-y increase. The figure included the operating results of The Cosmopolitan of Las Vegas resort acquired in May 2022, which drove the revenue figures up and partially offset the sale of The Mirage and Gold Strike Tunica resorts. The 36% better result than the same period last year was also due to the boosted post-COVID MGM China Resort activity and the continuously busy Las Vegas Strip Resort.
In the first quarter of 2023, MGM Resorts recorded an operating income of $731 million which included the $398 million gain from the above-mentioned sale. These factors led to the $467 million net income over the observed period compared to the $18 million net loss seen in the first quarter of 2022.
Record Adjusted EBITDAR:
The share prices also increased and the company benefited from diluted income per share of $1.24 against diluted loss per share of $0.06 in the same period last year. MGM’s consolidated Adjusted EBITDAR (earnings before interest and other non-operating income, taxes, depreciation, and amortization) amounted to a record $1.1 billion and facilitated the launch of $2.4 billion in operating, investing, and financing activities.
Las Vegas Strip Results:
Las Vegas Strip resorts generated $2.2 billion in net revenues in the quarter that ended on March 31, 2023, which is $ 0.5 billion or 31 percent more than the prior year’s quarter. The growth was the consequence of the accelerated activity after the termination of COVID-19 restrictions and the inclusion of The Cosmopolitan Resort in the company’s operations. Adjusted Property EBITDAR, therefore, amounted to $836 million to stand for the 41% rise on a year-on-year basis.
Regional Operations Growing:
Regional operations of MGM Resorts reached the level of $946 million in net revenues in the first quarter of 2023. When compared to last year’s quarter’s figure of $891 million, this quarter’s mark represents a 6% increase which was mainly driven by the increased non-gaming business volume. Adjusted Property EBITDAR kept the same level of $313 million in Q1 2023 as the first quarter of 2022.
130% Revenue Increase by MGM China:
The removal of COVID-19 restrictions at the beginning of this year resulted in the booming activity of the company’s Chinese operations. MGM China used the re-opening wave to reach the $618 million height in net revenues, compared to the $268 million level of the same period last year. This revenue figure represents an increase of 130% and a 16% lower level than the pre-pandemic 2019.
Adjusted Property EBITDAR of $169 million in the current quarter stands against the last year’s loss of $26 million and a decrease of 12% compared to the benchmark first quarter of 2019.
Corporate expense was primarily driven by payroll expenses to increase to $128 million in the first quarter of 2023 from $111 million experienced in the first quarter of 2022, according to the company, which improved the financial results across all operations in the current quarter.
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