MGM China’s 2021 revenue beats forecasts with 85 per cent jump, but lingering Covid-19 risk may dampen casino takings
- Company co-chaired by Pansy Ho reports adjusted Ebitda of US$48.7 million for the full year ended December 31
- Pent-up demand and China’s expanding prosperity will continue to support recovery in gaming: Morningstar analyst
According to the results announced on the Hong Kong exchange on Thursday, the company’s gross gaming revenue from mass gaming grew 18 per cent quarter on quarter in the fourth quarter, outperforming the industry’s 13-14 per cent growth, according to JPMorgan. The contribution from its VIP gaming segment, however, fell 3 per cent in the quarter.
In the fourth quarter, the company, which is controlled by New York-listed MGM Resorts International, reported net revenue of HK$2.45 billion, an increase of 9 per cent quarter on quarter. Quarterly Ebitda including one-off bad debt expenses came in at HK$89 million, down 11 per cent from the previous quarter. With the one-off item, the Ebitda would have been HK$166 million, representing an increase of 66 per cent, according to Jefferies.
“We maintain our constructive view on Macau’s long-term gaming demand, while the near-term revenue will likely continue to be challenged by the combined factors of prolonged travel restrictions linked to Omicron or other new variants, and the closure of junket VIP rooms,” Jennifer Song, a Hong Kong-based senior equity analyst at Morningstar, said in an emailed response. “We think strong pent-up demand and China’s expanding prosperity will continue to support Macau gaming revenue’s recovery.”
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High hopes for China’s Greater Bay Area, but integrating 11 cities will pose challenges
The city recorded 31 per cent growth in visits to 7.7 million in 2021, which was, however, 80 per cent lower than in 2019 as a result of various travel restrictions and quarantine measures.