internationalcasinoreview Business NEWS
MGM Resorts returns to profit in 2011
There was an improving picture for debt-laden MGM Resorts in 2011: with its MGM China division bringing home the bacon, it also saw revenues in the US moving upward. The company even managed to overturn 2010’s loss to record a fairly healthy profit.
backtoblack MGM RESORTS INTERNATIONAL
Gaming revenues at MGM Resorts International rose a substantial 29.5 per cent in 2011 over the previous year to come in at $7.85bn (E5.89bn), not least thanks to a $1.5bn (E1.13bn) contri- bution from its share in MGM Grand Macau. Excluding the effects of the Chinese operation, net revenues still increased by around four per cent with Adjusted Property EBITDA from its US operations up 11 per cent to $1.3bn (E976.3m).
MGM China’s Adjusted
Property EBITDA for the period from June 3, the date of its IPO on the Hong Kong
Stock Exchange, to the end of the year was $360m (about E270m). Like many of its competitors, the operation scored record results in 2011 with net revenues of $2.6bn (E1.95bn), up 66 per cent, with Adjusted EBITDA for the whole year up 76 per cent to $630m (E473.1m). Back in the US, the
company’s flagship property CityCenter saw substantial improvements with net revenue from resort opera- tions of $1.1bn (E826.1m) and Adjusted Property EBITDA of $236m (E177.2m). Having registered a loss of $1.34bn (E1bn) in 2010, MGM swept back into the black in 2011 with a net profit of $3.11bn (E2.33bn).
MGM Resorts majority share in MGM Grand Macau is a big boost to the business but revenues are picking up at home too
The company will also benefit this year from a divi- dend announced by the board of MGM China on Feb- ruary 22: $400m (E300m) will be divided between shareholders in March, bring- ing MGM Resorts Interna- tional a handy $204m (E153.2m), representing its 51 per cent share in the busi- ness.
Jim Murren, chairman and
CEO, said: “2011 was a year in which we achieved many
Atlantic City revenues back down Revenues from Atlantic City casinos resumed a downward trend in January after a hope-giving blip in December. Compared to January 2011, GGR fell 7.2 per cent to $236.9m (E177.9m). Slot machine win was flat at $164.7m (E123.7m), while table games, which have suffered from rising competition in Pennsylvania and Delaware, dropped 20.1 per cent to $72.2m (E54.2m). Resorts Casino (pictured) was the only one to gain with revenues up 3.2 per cent, while ACH saw a 20.6 per cent decline. The largest casino by revenue, Borgata, saw a fall of 2.4 per cent.
returnoninvestment SKYCITY ENTERTAINMENT
goals operationally, strategi- cally and financially. Opera- tionally, we enhanced our customer experience through targeted reinvest- ment in our properties and improved relationships through our M Life customer loyalty programme. Strategi- cally, we acquired a majority interest in MGM China and began expanding our brand presence in key markets throughout the world. Finan- cially, our revenues and
Casinos lead Rank’s continued rise
toprank RANK GROUP
Group revenues at Rank, the parent company of the UK’s second largest casino opera- tor Grosvenor Casinos, rose 3.9 per cent in 2011 com- pared to 2010, to reach £589.9m (E697.3m), leading to an adjusted profit before tax of £58.8m (E69.5m), up 6.5 per cent on the previous year.
The company, which
acquired a new majority shareholder in the Guoco Group last year, has decided to change its reporting period to June in order to match Guoco’s - so the company is now offering its latest results as interim and comparing the second half of last year against
G Casino Stockton, which opened in September, is the 17th G Casino in Rank’s estate
the same period in 2010. On that basis, group revenues rose 3.2 per cent in the six-month period to £295.9m (E349.7m) to generate an adjusted profit before tax of £32.5m (E38.4m), up eight per cent. Overall, the company saw visitor numbers at its casinos, bingo halls, online and in Spain
rise by 4.6 per cent to over 2.75m, with the actual number of visits up 4.9 per cent to 14.2m, however, spend per visit reduced by 1.6 per cent to £20.78 (E24.56). The 37 venues in the
Grosvenor Casinos division again performed strongly in both the half- and full-year periods. In the six months to the end of December it saw revenues of £125.8 (E148.7m), up 3.1 per cent, while in the 12-month period,
revenues were up 4.4 per cent to £249.2m (E294.5m). Oper- ating profits before excep- tional items were up by 10.9 per cent to £20.4m (E24.1) and by 12.8 per cent to £40.6m (E48m) in the respec- tive periods.
The number of customers
rose 5.6 per cent to just under 1.2m, and the number of visits by 9.6 per cent to just over 3m. Spend per visit fell back six per cent to £41.12 (E48.60).
MORE. 52 March 2012 • businessnews
Revenues at Grosvenor’s London casinos were down 5.7 per cent to £46.5m in the six-month period, although operating profit rose 9.7 per cent to £10.2m (E12m). The company said that the anomaly was due to higher than usual bad debts in the comparison period. Revenues from the provincial casinos rose 11 per cent to £71.5m (E84.5m) with operating profits up 28 per cent to £11.4m (E13.5m), taking them above the London results for the first time. The two Belgian casinos were affected by an extension to the smoking ban and saw rev- enues down six per cent in the half to £7.8m (E9.2m) leading to an operating loss of £1.2m (E1.4m).
margins have improved year over year, increasing our cash flow and strengthening our financial profile. Going forward, we expect to build off these strategies to grow our company.” The company is still
labouring under a substan- tial debt-burden, which at the end of 2011 stood at E13.6bn (E10.21bn), includ- ing $3.3bn (E2.48bn) out- standing from its senior credit facility.”
New Zealand-based SkyCity has reported a normalised profit after tax of NZ$78.8m (E49.3m) for the six months to the end of December. Group revenues from its four casinos in New Zealand and Australia rose 10.3 per cent to $494m (E309.2m), with well over half of that generated by its flagship SkyCity property in Auckland, which saw revenues of $268.9m (E168.3m) up 14.4 per cent.
CEO Nigel Morrison said: “The positive result was partly driven by the Rugby World Cup finals in New Zealand in October, which we estimate delivered around $11.5m [E7.2m] in revenues… However, it is mainly due to strong fundamentals in our Auckland gaming businesses, much of which is attributable to the recent $50m [E31.3m] revitalisation of the Auckland property and the continued growth in our international business following the opening of our Horizon suites and salons in July 2011.”
Revenues from the
international business in Auckland rose 31 per cent to more than $20m (E12.5m).
© 2011 IGT. All rights reserved.
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