Gaming and hospitality giant MGM Resorts International has shared its report for the first quarter of 2022. The business delivered consolidated net revenues of $2.9 billion, compared to $1.6 billion in the prior-year quarter, representing an increase of 73%.
Casino revenue increased 29% to $1.42 billion, while rooms revenue increased by 181% to $557.1 million. Food and beverage revenue rocketed by 213% to $492.9 million, while entertainment, retail and other revenue jumped 175% to $371.6 million. Operations on the Las Vegas Strip accounted for $1.67 billion of total revenue.
The quarter benefited from the inclusion of the operating results of the Aria and Vdara resorts in Las Vegas, after consolidation in September 2021. However, it was negatively affected by a decrease in business volume and travel due to the spread of the omicron variant in the early part of the quarter.
Despite this setback, results improved over the prior-year quarter, which was negatively affected by midweek property and hotel closures, lower business volume and travel activity, and operational restrictions due to the Covid-19 pandemic, primarily at the Las Vegas Strip Resorts.
Thus, the company managed to post a net loss of $18 million, reducing a $332 million net loss attributable to MGM Resorts in Q1 2021. However, this figure was down from the $31 million net income reported in the pre-pandemic first quarter of 2019.
“We delivered a strong first quarter in our domestic operations driven by weekend demand and a better mix of business,” said Bill Hornbuckle, Chief Executive Officer and President of MGM Resorts International. “Our midweek business is improving with each quarter and our group base is growing after a tough January.”
The results show robust demand for the company’s gaming entertainment offerings, with the backdrop of increased sports and entertainment programming in the Las Vegas market. Las Vegas Strip Resorts and Regional Operations Adjusted Property EBITDAR increased 47% and 48% respectively when compared to Q1 2019.
Subsequent to the quarter’s closure, the company announced an offer to acquire Swedish online gaming company LeoVegas for a total tender value of approximately $607 million. In his statement following the Q1 financial results presentation, Hornbuckle said the move will allow the company to expand into international iGaming “with a world-class management team, strong IT platform and growth prospects.”
The company has also recently closed a high-profile deal with the $17.2 billion sale of MGM Growth Properties to real estate investment trust VICI Properties. “We reached another milestone in the completion of our asset-light strategy with the closing of the VICI transaction,” stated Hornbuckle in regards to the sale.
The move is set to allow MGM to simplify its corporate structure and bolster its liquidity while deploying capital into growth projects with high shareholder return. “We remain focused on achieving our vision to be the world’s premiere gaming entertainment company,” the CEO said.
Other quarter highlights include the pursuit of a commercial gaming license for New York, and the advancement of plans for an Integrated Resort in Osaka, Japan. If greenlighted for the Osaka project, MGM hopes to see foundation work take place in late 2023, Hornbuckle said.
Rendering for the proposed integrated resort in Osaka, Japan
The CEO further explained the company hoped to get a decision on the Osaka project “in October this year” from Japan’s government. Based on previous statements, the Osaka resort would see an $8.3 billion investment with a target date of 2029 for opening.
Meanwhile, the company’s existing operations in Asia, through majority ownership of Macau operator MGM China Holdings, posted disappointing financial results: a 45.8% year-on-year fall in adjusted EBITDA. This is mostly credited to continuing restrictions on travel and measures imposed against the Covid-19 pandemic. However, Hornbuckle said the business was well-positioned to capture premium-mass business “as volumes begin to return.”
“Our strong liquidity position, coupled with our confidence in the long-term recovery of our core business, has allowed us to continue to focus on maximizing long-term shareholder value,” said Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts International. “We are disciplined in our approach to capital deployment and are focused on maintaining a strong balance sheet with adequate liquidity, while at the same time pursuing growth opportunities.”