Revenue at Macau casino operator MGM China Holdings Ltd fell 3.6 percent quarter-on-quarter in the three months to June 30, according to a Thursday filing to the Hong Kong Stock Exchange.
Second-quarter revenue for MGM China was just under HKD7.96 billion (US$1.02 billion), compared to nearly HKD8.26 billion in the first quarter. Year-on-year, second-quarter revenue rose 37.0 percent.
MGM China runs the MGM Macau property on the city’s peninsula, and MGM Cotai in the newer casino district of Cotai. The company is majority owned by U.S.-based casino firm MGM Resorts International.
The Macau unit’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were just over HKD2.44 billion in the three months to June 30, down 2.5 percent on the first quarter’s almost HKD2.50 billion.
Judged year-on-year, such second-quarter EBITDA rose 39.8 percent.
JP Morgan Securities (Asia Pacific) Ltd said in a Thursday memo: “Adjusted property EBITDA [at MGM China] was down only 2 percent quarter-on-quarter… bucking a soft seasonality and peers’ momentum (average minus 4 to 5 percent quarter-on-quarter on JP Morgan estimates).”
Analysts DS Kim, Mufan Shi, and Selina Li said that was despite MGM China’s “outsized high base last quarter,” which had been “an all-time high”.
At MGM Macau, main-floor table games drop was flat quarter-on-quarter, at HKD14.33 billion, compared to HKD14.44 billion in the first three months.
But VIP rolling chip turnover – a volume indicator for so-called ‘dead chips’ used in high-roller play – dipped sharply quarter-on-quarter. It was HKD8.31 billion in the second quarter, down 31.6 percent on the first quarter’s HKD12.15 billion.
At MGM Cotai, the sequential decline in rolling chip volume was even sharper. The second-quarter figure was just under HKD23.62 billion, or 55.4 percent down on the first quarter’s HKD53.00 billion.
Main floor table games drop at MGM Cotai went up 1.3 percent sequentially in the second quarter, to nearly HKD15.65 billion.
As a Hong Kong-listed company, MGM China reports its results on an interim and full-year basis, and provides quarterly highlights.
The firm said in a Thursday press release that first-half adjusted EBITDA margin had reached a “record high” of 30.5 percent, compared to 29.7 percent for same period in 2023, and 27.2 percent in 2019.
MGM China stated regarding the first six months of trading: “Property visitation was up 85 percent year-on-year or represented 153 percent of 2019.
“Net revenue grew by 52 percent year-on-year to HKD16.2 billion for the period… 144 percent of same period in 2019.”
The firm added: “We are glad to see market share [of gross gaming revenue] further climbed to 16.5 percent for the [six-month] period, from 14.9 percent a year ago and 9.5 percent in 2019. MGM Cotai market share was 9.8 percent and MGM Macau market share was 6.7 percent.”
The release cited Kenneth Feng, president and an executive director at MGM China, as saying: “We are delighted to see our continuous growth and outperformance driven by our deep understanding and customers and our ability to adapt swiftly to their preferences.”
MGM China – which resumed dividend payments in March, with a year-end dividend for 2023 – stated that in the first half this time, it had maintained a “healthy financial position”. Total liquidity as of June 30 amounted to approximately HKD16 billion, comprised of cash and cash equivalents and undrawn revolver.
The parent said 2024 corporate expense for MGM China was in the region of US$40 million to US$50 million. MGM China debt amounted to US$3.1 billion, stated MGM Resorts.
In June, MGM China confirmed the pricing and net proceeds due from its freshly-announced issuance of US$500-million in senior unsecured notes.