MGM reports slight increase in Q2 operating income as 2020 plan begins
Consolidated net revenue at MGM Resorts rose 13% year-on-year in the second quarter of 2019 to $3.2bn.
The operator reported a rise of 2% in operating income to $371m, with Q2 including $43m in restructuring costs related to the operating model component of the MGM 2020 plan.
As a result, net income dropped 65% to $43m, while adjusted EBITDA increased 9% to $756m.
At its Las Vegas Strip resorts, MGM generated revenue of $1.5bn, up 1%. Adjusted property EBITDA was $418m, a 4% decrease.
MGM attributes this to a drop in table games revenue, which had a $26m negative impact to adjusted property EBITDA.
From its MGM China brand, the operator increased its revenue by 26% to $706m. MGM said this was a result of a continued ramp up of operations at MGM Cotai, following its opening in February 2018.
Adjusted property EBITDA for MGM in China was $171m, up 43%.
At its regional operations, MGM made revenue of $911m, rising 29%. MGM Springfield, which opened on 24 August 2018, generated $76m of that total, while $55m came from Empire City Casino and $68m came from MGM Northfield Park.
Adjusted property EBITDA in MGM’s regional market was $255m, rising 34%.
During the quarter, MGM released 557 employees as part of a company-wide cost reduction effort to save $100m.
MGM planned to cut more than 1,000 jobs as part of the MGM 2020 initiative.
Jim Murren, Chairman and CEO of MGM Resorts International, said: “We expect MGM 2020 will be an additional catalyst for second half earnings growth.
“We are confident we will achieve our 2020 targets of $3.6bn to $3.9bn in consolidated adjusted EBITDA and significant growth in free cash flow through continued ramp up at our newer properties and further progress in executing our MGM 2020 Plan.”
MGM said it was excited by the opportunities developing in Japan and would maintain efforts in that new market as plans for integrated resorts firm up.
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