MGM China H1 revenue down 46% year-on-year
MGM China has recorded total revenue of HK$3.2bn for H1 2022, down 46% from the same period last year.
The group recorded negative adjusted EBITDA of HK$337m, compared to adjusted EBITDA of HK$200m for H1 2021.
These half-year results became apparent following the release of MGM Resorts’ Q2 report. In it, the operator's MGM China arm posted revenue of HK$1.1bn for Q2 2022 and recorded negative adjusted property EBITDA of HK$382m, compared to adjusted EBITDA of HK$64m in Q1 this year.
MGM China, naturally, attributes these significantly poorer finances to the adverse effects of Covid-19 in Macau this year.
The operator notes total Macau visitation from Mainland China decreased by 12% for the first six months of 2022. This figure would not have been helped by the most recent lockdown in Macau, which is only now just coming to an end.
However, MGM China is happy to have retained a 14% share of the local market, up from 11% a year ago. Given lockdown measures have affected all operators in Macau, this metric will help MGM China compare itself against competitors.
Alongside its financial statement, MGM China’s President and COO Hubert Wang said the operator will use the brand's non-gaming presence to satisfy Macau’s new concession-tender requirement by bringing more overseas customers to the city.
Wang subsequently confirmed the operator was working towards a 14 September deadline to submit a new gaming rights tender to Macau’s Government.
“The [Macau] Government does focus on overseas markets, so this is where MGM China has a lot of strengths with its global distribution network, so we’ll be able to focus on that” Hubert Wang, MGM China President and COO
He said: “The [Macau] Government does focus on overseas markets, so this is where MGM China has a lot of strengths with its global distribution network, so we’ll be able to focus on that.
“We will leverage out of our traditional strengths in arts and culture, [to deliver] the non-gaming diversification that the Government is asking for.”
Talk about trying to make friends early...
SJM Holdings receives HK$2bn loan from shareholder STDM
Macau concessionaire SJM Holdings has entered into a loan agreement for HK$2bn ($254.8m) with its controlling shareholder Sociedade de Turismo e Diversões de Macau (STDM). The loan is for a fixed six-year period and has an interest rate of 4%.
STDM has issued the loan to ensure SJM Resorts (an SJM subsidiary) has the funds to qualify for the new gaming tender process.
Bids are currently being drafted by Macau's operators, with a deadline of 14 September in place. The new 10-year gaming concession period is expected to commence on 1 January 2023.
Both STDM and SJM claim the loan highlights their joint confidence in the long-term growth potential of Macau, once the region’s travel restrictions end and operating capacity returns to pre-pandemic levels.
However, the loan issued by STDM does point to the financial state SJM is currently in. Although it is near-universally accepted that Macau will bounce back economically, the question of when is becoming ever-more pertinent for local operators like SJM.
Konami gaming revenue up 22%; but profit declines
Konami’s ‘Gaming & Systems’ segment generated ¥7.7bn ($57.3m) in Q2 revenue, a year-on-year increase of 22%.
The company’s casino facilities across North America and Australia returned to pre-Covid operating levels, partially offsetting other regions under restrictions.
However, Konami said the market as a whole is “on the road to recovery.” Slot machines have “sold well,” it added, while new gaming content led to increased sales.
In addition, Q2 saw the company enter New York State’s video lottery terminal (VLT) market and it mentioned plans to supply Class II gaming machines to Native American tribes.
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