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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, conventions and air travel, the Strip was not friendly to casino operators during the pandemic. Capacity constraints due to Covid have also weighed on casino operations.
While
MGM Resorts
Regional casino operations and online gambling platform, BetMGM, helped mitigate the damage, 2020 was a difficult year for the company.
MGM Resorts (ticker: MGM), whose signature Las Vegas properties include the Bellagio, The Mirage and Mandalay Bay, lost 92 cents a share in the fourth quarter, compared to earnings of $ 3.91 a year earlier. On an adjusted basis, it lost 90 cents per share, from earnings of 8 cents per share in the fourth quarter of 2019.
Revenues fell to just under $ 1.5 billion, down from nearly $ 3.2 billion in the same period in 2019, although it improved from about $ 1.1 billion in the third quarter.
For all of 2020, the company reported a loss of $ 2.02 per share, versus a profit of $ 3.88 the previous year. On an adjusted basis, it lost $ 3.94 per share in 2020, compared to earnings of 77 cents in 2019. Year-on-year, sales fell sharply from $ 12.9 billion in the prior year to $ 5.2 billion in 2020.
“We continue to diligently navigate the short-term operating environment, aggressively use our business model and cost structure,” CEO Bill J. Hornbuckle told analysts on a profit call Wednesday after the market closed. “I am optimistic about the long-term recovery in all our markets and believe MGM is well positioned to gain market share.”
MGM shares were about $ 36 in after-hours trading, down about 1%.
Based on the company’s 2020 annual report, about 80% of its approximately 45,000 rooms and suites were in facilities on the Strip.
Fourth quarter net revenues for that segment were down 66% to $ 480 million, roughly unchanged from the third quarter, “due to the pandemic and related operating constraints and mid-week hotel closures at Mandalay Bay, The Mirage and Park MGM for part of the current quarter, ”said the press release announcing the company’s results.
“The fourth quarter got off to a relatively strong start here in Las Vegas with hotel occupancy of about 46% in October,” Hornbuckle said, adding that October was the company’s strongest month there since the pandemic began. “But public health concerns dampened visits over the quarter.”
That continued “at least until now until February,” he said.
“We are convinced that this headwind will continue in the short term. With current Nevada gathering guidelines in place and public health sentiment where it is, we expect weekday business to be put to the test during the first quarter. “
Looking ahead, Hornbuckle said that “assuming most of the population is willing to resume normal activity, which we glimpsed from last summer, we believe demand for travel and visits to Las Vegas could be high later this year. to be.”
For the company’s regional casino operations, net revenues outperformed the fourth quarter, down 34% year over year to $ 595 million, but 7% higher than the third quarter. The company’s properties include MGM Grand Detroit, which closed for part of the fourth quarter.
Regional casinos are less dependent on conventions, meetings and entertainment than Las Vegas and other larger markets.
The company said its BetMGM sports betting and igaming platform continued to perform well and gain market share. It’s now live in 12 states, including New Jersey, Tennessee, Iowa, and Colorado, and the company said it expects to be in 20 states by the end of the year.
The company does have offices in Macau, but is much less dependent on the market than
Las Vegas Sands
(LVS) and
Wynn Resorts
(WYNN).
MGM Resorts said net revenues for MGM China fell 58% in the fourth quarter to $ 305 million, but increased sharply from $ 47 million in the third quarter.
As of December 31, cash and cash equivalents were approximately $ 5.1 billion. Total liquidity was $ 8.8 billion.
Net long-term debt was approximately $ 12.4 billion.
Write to Lawrence C. Strauss at [email protected]