LAS VEGAS (KTNV) — MGM Resorts International is reporting a 29% hit to their revenue as a result of the coronavirus pandemic.
The company earned $2.3 billion between January and March. Revenue fell 21% for its Las Vegas properties and 63% for MGM China.
"The year started strong with results ahead of expectations, however the COVID-19 pandemic resulted in the closure of our properties which had a material negative impact on our first quarter results," said Bill Hornbuckle, Acting CEO and President of MGM Resorts. "It is still premature to predict the opening dates of our domestic properties. In the meantime, we are collaborating with public health officials, experts in epidemiology and biosafety, and both state and federal government to come up with a set of protocols that will help deliver a safe, secure environment for our employees and guests. We are aggressively managing our cash outflows and strengthening our liquidity position to make certain that despite a lack of revenue, we are able to advance our longer term strategic initiatives such as a new integrated resort in Japan, growing our business in Macau, and establishing a leading presence in sports betting and on-line gaming. With premier assets in most of the markets in which we operate, we are confident we will emerge from the crisis in a strong position."
Find more information below:
First Quarter 2020 Financial Highlights:
"During this unprecedented crisis MGM Resorts maintains a strong liquidity position. We have benefitted from the Bellagio, MGM Grand Las Vegas, and Circus Circus Las Vegas real estate transactions, which generated approximately $6.9 billion of cash. In addition to $4.6 billion of cash on the balance sheet as of March 31, 2020, excluding MGP and MGM China and adjusted for the recent bond offering, the Company also has access to $1.4 billion of additional liquidity upon the redemption of its operating partnership units in MGP. Furthermore, we have recently cut our dividend to maintain maximum flexibility and allow us to continue to invest in our business," said Paul Salem, Chairman of MGM Resorts. "As I have watched Bill and the team move swiftly to address the challenges of the COVID-19 crisis, I have tremendous confidence in their ability to manage the Company through these challenging times. I look forward to working with management and the rest of the Board of Directors to create long term shareholder value by executing on our key strategic initiatives and increasing returns on investment through disciplined capital allocation."
"We continue to implement an extensive number of initiatives to optimize our cash position, and currently estimate that while all of our properties are closed in the U.S., our domestic cash outflows, including interest, taxes, and rent (net of dividends received from MGP), are approximately $270 million per month," said Corey Sanders, Chief Financial Officer and Treasurer of MGM Resorts. "After the quarter end, we accessed the debt capital markets to bolster our liquidity position and amended our credit agreement to provide for additional flexibility with respect to our financial covenants. As such, our balance sheet remains sound."
Gov. Steve Sisolak ordered the casinos to close March 17, along with nonessential businesses. The governor is planning to talk about reopening or loosening some restrictions later today, but casinos are not expected to reopen immediately.
More information will be revealed today during a 5 p.m. press conference.