During Wednesday’s earnings call, MGM Resorts International CEO Bill Hornbuckle emphasized four priorities for the gaming operator: investing in employees and the planet; providing unique guest experiences; delivering operational excellence at every level; and allocating capital responsibly.
Those principles led to a banner fourth quarter, record cash flow and margins, and a rejuvenation of MGM’s Las Vegas Strip properties last year.
“We had a very strong end to a great year, producing our highest consolidated adjusted (earnings before interest, taxes, depreciation, and amortization) quarter in the history of the company,” Hornbuckle said during the call. “Our Las Vegas Strip resorts delivered yet another all-time quarterly EBITDA record and a regional deliberative fourth-quarter EBITDA record. Our Strip and regional margins also remained very strong in the fourth quarter.”
MGM Resorts reported income of $131 million for the fourth quarter of 2021 compared to a net loss of $448 million in the same period of 2020. Revenue for the quarter was $3.1 billion, a 105% increase compared to the fourth quarter of 2020.
MGM’s Las Vegas Strip properties generated $1.8 billion in revenue in the fourth quarter, a year-over-year increase of 277%. Regional properties brought in $900 million in revenue, a 51% jump from the fourth quarter of 2020.
Barry Jonas, analyst with Truist Securities noted that “MGM handily beat our/Street Q4 EBITDAR estimates (+16%/+19%) driven by strength in Vegas. The Vegas recovery continues to be stronger than expected (despite group and international missing) with potential Omicron speed bumps looking temporary. In addition, BetMGM remains an Interactive winner, though we’d still prefer MGM to own 100%.”
MGM China generated fourth quarter revenue of $315 million, a 3% increase compared to 2020, but a decrease of 57% compared to the fourth quarter of 2019.
For calendar year 2021, MGM Resorts reported revenue of $9.7 billion, an increase of 88% compared to the prior year. Net income was $1.3 billion in 2021, which included a $1.6 billion net gain related to the consolidation of City Center, compared to a net loss of $1.0 billion in 2020, which included a $1.5 billion net gain related to a real estate transaction involving the MGM Grand Las Vegas and Mandalay Bay.
“These results are a testament to a very talented team across the country and our sharpened focus on operational efficiency and the proven resiliency of demand for the services and experiences that we provide at MGM Resorts,” Hornbuckle said, “despite the overhang of COVID.”
Hornbuckle added that there are many reasons for optimism in 2022, notably the impending rollback of restrictions and mandates due to the pandemic. Earlier Wednesday, the Nevada Independent reported that Nevada Gov. Steve Sisolak is expected to lift the state’s mask mandate on Thursday.
That development would be welcome and as an example, Hornbuckle noted a recent dinner he had with a gentleman who expressed reservations about returning to Las Vegas.
“The guy loves Las Vegas. He’s just afraid to come back,” Hornbuckle said. “So I think there’s a segment of the market that has real disposable spend that we have not yet seen return.”
Hornbuckle added that the record revenue of 2021 was achieved with “no appreciable international play.”
The CEO also noted the possibility of being awarded a license to build an integrated resort in Osaka, Japan, with Orix Corp. and progress being made in efforts to be awarded a commercial gaming license in New York as early as this year.
“We believe MGM is extremely well positioned, given our existing operations in Empire City,” Hornbuckle said.
Shares of MGM Resorts closed at $48.52 Wednesday on the NASDAQ, up $1.31 or 2.77%.
