MGM Resorts second quarter results outpace 2021, with record setting EBITDAR reported

MGM Resorts second quarter results outpace 2021, with record setting EBITDAR reported

  • Rege Behe
August 4, 2022 12:45 AM
  • United States
  • Commercial Casinos

MGM Resorts International CEO and President Bill Hornbuckle Wednesday was more than pleased with the results he relayed during the gaming company’s quarterly earnings conference call.

Net revenues soared to $3.3 billion for the quarter, a 44% year-over-year increase from the $2.3 billion generated in 2021. Net income for the quarter was $1.8 billion, which included a gain related to the deconsolidation of MGM Growth Properties, compared to $105 million the prior year.

Diluted earnings per share were $4.20 in the second quarter, compared to $0.14 a year ago. But Hornbuckle seemed notably excited by record Las Vegas Strip Adjusted Property EBITDAR of $920 million.

“Our second-quarter results represented our highest adjusted property EBITDAR in the history of Las Vegas,” Hornbuckle said during the call.

The second quarter was also MGM’s best for adjusted property EBITDAR at its regional properties, totaling $340 million.

The gaming operator’s Las Vegas Strip properties accounted for revenue of $2.1 billion in the quarter, compared to $1.0 billion year over year, a 113% increase. Hornbuckle noted that MGM benefited from the inclusion of newly acquired properties The Cosmopolitan and the Aria Resort & Casino.

Same-store net revenue, adjusted for acquisitions and dispositions, was $1.6 billion, a year-over-year increase of 60%.

Chief Financial Officer Jonathan Halkyard credited the improved figures to the return of customers to the Strip in quarter two.

“Unlike visitation or the variation month to month that we experienced in the first quarter due to omicron (the COVID variant), our second-quarter ADR (adjusted daily rate) and profitability were consistent through the quarter,” Halkyard said. “Second-quarter occupancy was 92%, continuing the strength that we saw when we exited March. “¦ Pricing remains strong, with ADR in the second quarter at a record $225.”

Halkyard added that on a same-store basis, ADR of $201 was 34% above the second quarter of 2021.

Regional properties generated revenue of $960 million, a 12% increase compared to $856 million in the same period in 2021.

Results for MGM China’s properties in Macau were “severely limited,” according to Halkyard, because of ongoing restrictions due to COVID. Second-quarter revenue for MGM China was $143 million, a 54% decrease from the same period in 2021. Adjusted property EBITDAR was a loss of $52 million, compared to a positive $9 million in 2021.

MGM also reported losses of $71 million in its 50-percent share of BetMGM, its partnership with Entain.

In an analyst’s statement, Truist Securities marketing director Barry Jonas noted that MGM’s strong second quarter beat its forecasts, with “strength continuing in the third quarter.

“While we see MGM as perfectly executing its strategy, we maintain our Hold rating as Vegas and Regional strength appears to be somewhat offset by A) investor concerns of inflation/recession (though no signs yet), B) interactive/BetMGM risks and C) visible Macau weakness. We increase estimates significantly (2022E/23E EBITDAR up +13%/+15%) and raise our PT accordingly to $40 from $35.”

MGM Resorts International closed at $34.20 on the NASDAQ, up $1.14, or 3.45%.

Rege Behe is lead contributor to CDC Gaming Reports. He can be reached at rbehe@cdcgaming.com. Please follow @RegeBehe_exPTR on Twitter.