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China – MGM China reports increase in mass gaming

By - 20 February 2017

MGM China generated total revenue in 2016 of HK$14.9bn, down from HK$17.2bn in 2015 although it did manage to improve its operation efficiency and margins.

The group though mirrored the wider Macau market with mass gaming up slightly whilst VIP gaming suffered a big downturn. While total gaming revenue in Macau declined by three per cent from previous year, the mass gaming revenue grew by an estimated six per cent year on year, but still grew less that the increase in market supply.

Adjusted EBITDA margin increased 290 basis points from a year ago to 30.1%, while net profit margin grew 230 basis points to 20.4 per cent.

MGM said: “This was driven by a combination of our disciplined cost savings efforts and a favorable shift in mix between mass and VIP. Contribution from main floor business continued to grow and reached approximately 80 per cent of profit for the year.”

For the year, the group recorded main floor table games win of HK$7.7bn, an increase of two per cent from a year ago, despite disrupted from the renovation of food and beverage outlets and remodeling of gaming floor at MGM MACAU during the Quarter. VIP table win was down 26 per cent year on year.
MGM Macau occupancy rate was 95.4 per cent for the year. The group believes the property remains a popular and premium destination for high quality customers and while gaming occupancy has reduced, we have been successful in attracting new non-gaming customers.

Grant Bowie, Chief Executive Officer and Executive Director of MGM China said: “To maintain its competitiveness, we have been undergoing a remodeling of main floor at MGM Macau including creating additional retail space and upgrading our food and beverage offerings. Two new dining outlets at MGM Macau were launched earlier in 2017. The new restaurants provide authentic and diversified casual dining experience to our local and Chinese customer base. We also opened a new gaming area on the main floor to extend our offerings for our premium mass customers. The group is working at full speed to prepare for the opening of MGM Cotai in the second half this year. The majority of all building enclosure works for the tower and the podium have completed including exterior signage on the towers and the erection of the MGM Lion at the north end of the property. Principal efforts across both the podium and the hotel towers continue to be building systems testing and commissioning in parallel with fit-out activities related interior finishes. With almost twice the square footage of MGM Macau, our new MGM Cotai property will allow us to capitalise on our expertise in providing exciting and diversified entertainment offerings. We are committed to continuing to bring extraordinary and memorable events to our properties in support of Macau Government’s vision for diversification and developing the city as a world-class tourism destination.”

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