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MGM Resorts International
suffered major pandemic-related losses in the fourth quarter and 2020 due to the company’s large presence on the Las Vegas Strip.
With its heavy reliance on group travel, events, and air travel, the Strip has not yet been friendly to casino operators during the pandemic. Capacity constraints due to Covid also weighed the casino operations.
While
MGM Resorts
a local casino operating and online gambling platform, BetMGM, helped reduce the damage, 2020 was a difficult year for the company.
MGM Resorts (ticker: MGM), whose distinctive Las Vegas properties include Bellagio, The Mirage and Mandalay Bay, lost 92 cents a share in the fourth quarter, compared to a profit of $ 3.91 a year earlier . On an adjusted basis, it lost 90 cents a share, up from 8 cents a share in the fourth quarter of 2019.
Revenue fell to just under $ 1.5 billion from $ 3.2 billion in the same period in 2019, although it improved from about $ 1.1 billion in the third quarter.
For the whole of 2020, the company reported a loss of $ 2.02 per share, compared to a profit of $ 3.88 the previous year. On an adjusted basis, it lost $ 3.94 per share in 2020, compared to a 77-cent gain in 2019. Year-on-year revenue fell sharply to $ 5.2 billion in 2020, from $ 12 billion. 9 billion in the previous year.
“We are eager to navigate the operating environment in the short term and aggressively manage our operating model and cost structure,” CEO Bill J. Hornbuckle said Wednesday after the market closed. “I am optimistic about the long-term recovery in all our markets and believe that MGM is well positioned to take part.”
MGM shares were about $ 36 after trading hours, down about 1%.
Based on the company’s annual report for 2020, about 80% of the approximately 45,000 rooms and suites in facilities were located on the strip.
The fourth quarter’s net revenue for that segment fell 66% to $ 480 million, roughly equal to the third quarter, “due to the pandemic and associated operating restrictions, as well as the closure of the hotel in the middle of the week at Mandalay Bay, The Mirage and Park MGM for part of the current quarter, according to the press release announcing the company’s results.
“The fourth quarter started relatively strong here in Las Vegas with a hotel occupancy of about 46% during October,” Hornbuckle said, adding that October was the strongest month since the start of the pandemic. “But public health is a subdued visit over the course of the quarter.”
It has continued “at least until now until February,” he said.
“We believe this wind will continue in the short term. Because the current Nevada guidelines are in effect and the sense of health where it is, we expect issues to be challenged in the midweek during the first quarter. ”
Looking ahead, Hornbuckle said that “assuming that most of the population is willing to resume normal activities, which we saw last summer, we see that demand for travel and visits to Las Vegas may be strong later in the year. . ”
For the company’s local casino operations, fourth-quarter net income improved and fell 34% year-on-year to $ 595 million, up 7% from the third quarter. The company’s properties include MGM Grand Detroit, which was closed for part of the fourth quarter.
Regional casinos are less dependent on events, meetings and entertainment than Las Vegas and other larger markets.
The company said its BetMGM sports betting and igaming platform is still performing well and gaining market share. It is now in 12 states, including New Jersey, Tennessee, Iowa and Colorado, and the company said it will be in 20 states by the end of the year.
The company does operate in Macau, but it is much less dependent on the market than
Las Vegas Sands
(LVS) and
Wynn Resorts
(WYNN) is.
MGM Resorts said its net revenue for MGM China fell 58% in the fourth quarter to $ 305 million, but rose sharply from $ 47 million in the third quarter.
At December 31, cash and cash equivalents amounted to approximately $ 5.1 billion. The total liquidity was $ 8.8 billion.
Net long-term debt amounted to approximately $ 12.4 billion.
Write to Lawrence C. Strauss by [email protected]