A statement just released by MGM Resorts International sheds light on the company's current status and the ways in which it's maneuvering to mitigate fiscal damages being inflicted by the COVID-19 pandemic.
All operations at MGM's domestic hotel and casino properties have been suspended since March 16, 2020. "At MGM Resorts, we are committed to doing our part to mitigate the spread of COVID-19, including the closure of our properties across the United States," said Bill Hornbuckle, Acting CEO and President of MGM Resorts.
"While this will undoubtedly have a significant negative effect on our business in the near-term, we are well-positioned to emerge from the current crisis in light of our strong liquidity position and valuable asset portfolio. We are currently making very difficult decisions, but believe these will be in the best interest of the Company long-term."
As of March 26, 2020, MGM Resorts Domestic Operations reported liquidity balances of approximately $3.9 billion, including $1.5 billion drawn under its revolving credit facility.
The other good news is that MGM's figures for domestic business performance during the first two months of 2020 were strong: $1.3 billion, up significantly from the $27 million seen in the same period in 2019. Of course, in March, the company incurred substantial operating losses due to the escalation of the coronavirus public health emergency, but MGM says that it's swiftly implementing policies to "significantly reduce expenses to protect its financial position."
The company estimated that between 60 and 70 percent of its domestic operating expenses are variable, and is leveraging means of minimizing these costs, including implementing hiring freezes, furloughs and other headcount reductions. "Most of our employees are either working from home or have been put on furlough," Hornbuckle disclosed in an online video message addressed to MGM team members.
MGM said that it's also reviewing fixed operating expenses and corporate expenditures to identify further opportunities for cost-cutting. In addition, "the Company is evaluating all capital spend projects and expects to defer at least 33 percent of planned 2020 domestic capital expenditures."
By proactively and carefully managing its expenses and other cashflow items, monitoring its balance sheet and fully drawing its revolving credit facility, MGM Resorts remains confident that it will successfully, "weather this downturn and ultimately rebound from the impacts of the current crisis."
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