MGM Resorts Reports Casino Revenue Down, Rooms Revenue Up
By Mimi Kmet
August 07, 2012 10:43 PM
MGM Resorts International reported a drop in domestic casino revenue and a rise in Las Vegas rooms revenue in its second-quarter 2012 financial results. Net revenue for the company's wholly owned domestic resorts was $1.5 billion in both the current and prior year second quarters. Casino revenue decreased 1 percent at MGM Resorts’ wholly owned domestic resorts, while rooms revenue increased 3 percent, with a 5 percent increase in revPAR at the company's Las Vegas Strip resorts.
Operating income for the company's wholly owned domestic resorts for the second quarter of 2012 was $214 million, an increase of 10 percent compared to the prior-year quarter, partially due to lower depreciation and amortization expense, according to the company. Adjusted property EBITDA for wholly owned domestic resorts increased 4 percent to $345 million for the second quarter of 2012. Operating income and adjusted property EBITDA were negatively affected by approximately $12 million in the prior-year quarter as a result of the temporary closure of Gold Strike Tunica in May 2011, the company stated.
MGM China earned net revenue of $709 million, a 6 percent increase over the prior-year quarter, driven by increases in volume for main floor table games and slots of 7 percent and 39 percent, respectively. MGM China's operating income was $90 million, and adjusted property. EBITDA was $187 million, which included $12 million of branding fee expense. Excluding branding fees, adjusted property EBITDA increased 14 percent over MGM Macau's prior-year second quarter results.
MGM China completed its initial public offering of shares on the Stock Exchange of Hong Kong Limited on June 3, 2011, and the company acquired an additional 1 percent interest in MGM China, which owns the MGM Macau resort and casino. This acquisition increased the company's ownership interest to 51 percent. As a result, the company began consolidating MGM China as of June 3, 2011. Prior to June 3, 2011, the results of MGM Macau were accounted for under the equity method of accounting.
Among the results for CityCenter Holdings, LLC for the second quarter of 2012, net revenue from resort operations increased 3 percent to $282 million. Adjusted property EBITDA from resort operations was $71 million, compared to $64 million in the prior-year quarter. Aria's table games hold percentage for the second quarter of 2012 was 24 percent, compared to 29.2 percent for the prior-year quarter. The estimated effect of the decrease in hold percentage compared to the prior-year quarter for net revenue and adjusted property EBITDA was $16 million and $13 million, respectively. Aria's occupancy percentage was 93 percent, and its ADR was $201, resulting in REVPAR of $187, a 3 percent increase compared to the prior-year second quarter.