MGM Resorts International reported second-quarter 2020 financial results on Thursday, announcing that net revenues decreased 91 percent compared to the same period last year to $290 million due to the ongoing impact of the coronavirus pandemic.
However, the company also revealed that domestic operations achieved better than expected results since phased reopenings began with enhanced health and safety protocols in place earlier this summer.
MGM reported a consolidated operating loss of $1 billion for the three-month period ended June 30 compared to income of $371 million during the same quarter in 2019. Meanwhile, on the Las Vegas Strip, the company experienced a 90 percent drop in net revenues compared to last year to $151 million, attributing the sharp decline to temporary closures and operational restrictions related to the COVID-19 pandemic.
"During the second quarter, we began reopening our properties across the U.S. and have been heartened by the better than expected demand in the marketplace," MGM Resorts President and CEO Bill Hornbuckle said in a statement accompanying Thursday's announcement. "I am grateful to the men and women who continue to dedicate their efforts to reopening our properties and welcoming our guests, safely, once again. In addition, our MGM 2020 plan and modifications to our operating model have directly contributed to our margin improvements during the period in which our properties were open."
"During the second quarter, we continued to take proactive steps to further bolster our already strong liquidity position by accessing the debt capital markets, amending our credit agreement to preserve access to our revolver, and causing MGP to redeem $700 million of MGM Resorts' operating partnership units for cash, under our agreement for MGP to redeem $1.4 billion of MGM Resorts' units," said Corey Sanders, Chief Financial Officer and Treasurer of MGM Resorts, in a statement. "Furthermore, we continued to work aggressively to reduce operating and corporate expenses during the re-opening process while providing a safe and appealing environment for our employees and guests."
"Our domestic liquidity, excluding MGM China and MGP, is $4.8 billion, before factoring in any additional change in our stake in MGP," Sanders concluded.
The company expressed optimism about expansion in Asia, including Osaka and Macau as well as the growth of its BetMGM online sports betting and gaming experience.
"As we look ahead, we believe the long term fundamentals of our business and the broader industry remain intact," added Hornbuckle. "However, the near term operating environment will remain challenging and unpredictable as COVID-19 case trends, health and safety protocols and travel restrictions continue to heavily impact our business. We remain focused, flexible, and disciplined in navigating this evolving landscape while continuing to pursue our long term growth opportunities, supported by our strong liquidity position."
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