MGM China Reports 2024 Interim Financial Data

Rhea-AI Summary

MGM China Holdings (SEHK: 2282) reported strong financial results for the first half of 2024. Net revenue grew by 52% year-on-year to HK$16.2 billion, reaching 144% of the same period in 2019. Adjusted EBITDA increased by 57% to HK$4.9 billion, surpassing pre-COVID levels at 161% of 2019. The company's market share climbed to 16.5%, up from 14.9% a year ago and 9.5% in 2019. MGM COTAI and MGM MACAU both showed significant improvements in revenue and adjusted EBITDA. The Group maintained a healthy financial position with total liquidity of approximately HK$16 billion. MGM China continues to focus on non-gaming events and international market expansion to align with Macau's vision of becoming a global, diversified tourist destination.

Positive

• Net revenue grew by 52% year-on-year to HK$16.2 billion, reaching 144% of 2019 levels
• Adjusted EBITDA increased by 57% to HK$4.9 billion, surpassing pre-COVID levels at 161% of 2019
• Market share climbed to 16.5%, up from 14.9% a year ago and 9.5% in 2019
• Adjusted EBITDA margin reached a record high of 30.5%
• Average occupancy rate increased to 93.9%
• Total liquidity of approximately HK$16 billion, indicating a strong financial position

Negative

• None.

Financial Analyst

MGM China's interim financial data for 2024 reveals a robust performance, significantly outpacing both its 2023 results and pre-pandemic levels. The company's adjusted EBITDA of HK$4.9 billion represents a 57% year-over-year increase and an impressive 161% of 2019 levels. This growth is particularly noteworthy given the broader Macau market's recovery to only 80-85% of pre-COVID EBITDA.

The company's market share expansion to 16.5% from 14.9% last year and 9.5% in 2019 is a strong indicator of its competitive positioning. This growth, coupled with a record-high adjusted EBITDA margin of 30.5%, suggests effective cost management and a successful focus on the higher-margin mass market segment.

MGM China's liquidity position of approximately HK$16 billion provides a solid financial buffer, enabling the company to invest in growth initiatives and weather potential market volatilities. The outperformance in property visitation, reaching 153% of 2019 levels, indicates strong customer appeal and effective marketing strategies.

However, investors should note that while the recovery is impressive, the sustainability of this growth rate may be challenging as the base effects of the pandemic recovery diminish. Future growth will likely depend on MGM China's ability to continue gaining market share and expanding its non-gaming offerings to align with Macau's diversification goals.

Market Research Analyst

The Macau gaming market's recovery is gaining momentum, with MGM China capitalizing on this trend. The 41% year-over-year increase in gross gaming revenue (GGR) to MOP 625 million per day, representing 76% of 2019 levels, indicates a strong rebound. More importantly, the mass gaming revenue's growth to 111% of 2019 levels suggests a structural shift towards a more sustainable revenue mix.

MGM China's outperformance is evident in its market share gain and property-specific metrics. The company's focus on the mass market segment aligns well with Macau's regulatory direction and appears to be paying off, as reflected in the record-high EBITDA margin.

The company's efforts to diversify its offerings through non-gaming events, such as concerts and art exhibitions, are strategically sound. These initiatives not only enhance MGM's appeal to a broader audience but also support Macau's vision of becoming a global, diversified tourist destination.

The expansion into international markets, particularly Southeast Asia, through promotional campaigns in Bangkok, is a forward-thinking move. As Macau seeks to reduce its reliance on mainland Chinese visitors, tapping into new source markets could provide MGM China with a competitive edge.

However, the sustainability of MGM China's growth rate and market share gains will be tested as the overall market recovery matures. The company's ability to continue innovating and differentiating its offerings will be important in maintaining its competitive position in an increasingly normalized operating environment.

Adjusted EBITDA up 57% Year-on-Year

Market Share Reached 16.5%

HONG KONG, July 31, 2024 /PRNewswire/ -- MGM China Holdings Limited ("MGM China" or the "Company"; SEHK Stock Code: 2282) today announced the selected unaudited financial data of the Company and its subsidiaries (the "Group") for second quarter and the first half of 2024 (the "Period").

The Group is pleased to see Macau continue to grow. Total visitor arrivals in first half of year increased 43% year-on-year to 91,868 per day. The visitation recovered to 82% of first half 2019.

Gross gaming revenue (GGR) in Macau was up 41% from same period in last year to MOP 625 million per day, represented a 76% recovery of first half 2019. In addition, mass gaming revenue grew 45% compared to a year ago, represented 111% of 2019. The continuous growth of mass market has boosted industry EBITDA to have recovered to an estimated 80-85% of 2019 pre-COVID levels.

• MGM China continued to outperform the market amid of industry recovery. Property visitation was up 85% year-on-year or represented 153% of 2019. Net revenue grew by 52% year-on-year to HK$16.2 billion for the Period, reached 144% of same period in 2019.
• The Group reported adjusted EBITDA of HK$ 4.9 billion for the Period, grew by 57% from a year ago. Adjusted EBITDA surpassed pre-COVID level at 161% of same period in 2019.
• We are glad to see market share further climbed to 16.5% for the Period, from 14.9% a year ago and 9.5% in 2019. MGM COTAI market share was 9.8% and MGM MACAU market share was 6.7%.
• Adjusted EBITDA margin for the Period reached record high of 30.5%, compared to 29.7% for same period in 2023 and 27.2% in 2019. It was attributed to our mass-focused business and continuous improvement in operational efficiency.
• Average occupancy was 93.9% for the Period (1H23: 91.7%).
• On a property basis, MGM COTAI recorded revenue of HK$9.5 billion (1H23: HK$5.7 billion) and an adjusted EBITDA of HK$2.8 billion (1H23: HK$1.7 billion).
• MGM MACAU had revenue of HK$6.8 billion (1H23: HK$4.9 billion) and an adjusted EBITDA of HK$2.1 billion (1H23: HK$1.5 billion).
• On a quarterly basis, Market daily visitation in second quarter 2024 reached 79% of pre-COVID levels. Daily GGR reached 77% of 19Q2. Mass GGR was estimated to be 111% of 19Q2.
• MGM China, in the second quarter, saw property visitation exceeded pre-COVID levels to 156% of same period in 2019. Daily GGR was 134% of 19Q2. Mass GGR was 185% of same period in 2019.
• Revenue of the Group was HK$8.0 billion, 144% of 19Q2. Adjusted EBITDA was HK$2.4 billion, 168% of 19Q2. Adjusted EBITDA margin was 30.7% (19Q2: 26.3%).
• The Group maintained a healthy financial position. As of June 30, 2024, the Group had total liquidity of approximately HK$16 billion, comprised of cash and cash equivalents and undrawn revolver.

With a guest-centric focus, MGM is awarded in February seven Five-Star awards by Forbes Travel Guide 2024. This demonstrates our leading position in the hospitality industry and its commitment to providing the finest service and resort amenities.

During the Period, MGM China has proudly delivered a series of non-gaming events and excitements to Macau. We have hosted in January an outdoor concert with Bruno Mars, the 15-time Grammy Awards-winner. We had also presented with world-renowned musician Tan Dun his symphonic masterpiece Buddha Passion at the MGM Theater at MGM COTAI. As a supporter of cultural tourism, MGM has showcased an exhibition with renowned Chinese contemporary artist Ren Zhe in his first-ever solo Macau show, MGM X Ren Zhe – 'Legends of Chivalry' Art Exhibition, featuring art pieces of classic characters from Jin Yong's martial arts novels.

Joining the Macao Government's initiative to expand international market reach, the Group hosted in June its first large-scale overseas promotional campaign in Bangkok, Thailand and participated in the Experience Macao roadshow in Bangkok organized by the Macao Government Tourism Office, to attract more visitors from Southeast Asia.

Kenneth Feng, President and Executive Director of MGM China said: "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.

"We are committed to bringing more unique and integrated experiences to our customers, to align our offerings with the Macau Government's vision to develop the city into a global and diversified tourist destination," said Kenneth Feng. 

About MGM China Holdings Limited

MGM China Holdings Limited (HKEx: 2282) is a leading developer, owner and operator of gaming and lodging resorts in the Greater China region. We are the holding company of MGM Grand Paradise, SA which holds one of the six gaming concessions to run casino games in Macau. MGM Grand Paradise, SA owns and operates MGM MACAU, the award-winning premium integrated resort located on the Macau Peninsula and MGM COTAI, a contemporary luxury integrated resort in Cotai, which opened in early 2018 and more than doubles our presence in Macau. 

MGM China is majority owned by MGM Resorts International (NYSE: MGM) one of the world's leading global hospitality companies, operating a portfolio of destination resort brands including Bellagio, ARIA, MGM Grand, Mandalay Bay and Park MGM. For more information about MGM Resorts International, visit the Company's website at www.mgmresorts.com.

View original content:https://www.prnewswire.com/news-releases/mgm-china-reports-2024-interim-financial-data-302211144.html

SOURCE MGM China

FAQ

What was MGM China's net revenue for the first half of 2024?

MGM China's net revenue for the first half of 2024 was HK$16.2 billion, representing a 52% year-on-year growth and 144% of the same period in 2019.

How much did MGM China's adjusted EBITDA increase in the first half of 2024?

MGM China's adjusted EBITDA increased by 57% to HK$4.9 billion in the first half of 2024, reaching 161% of the same period in 2019.

What was MGM China's market share in the first half of 2024?

MGM China's market share reached 16.5% in the first half of 2024, up from 14.9% a year ago and 9.5% in 2019.

How did MGM COTAI perform in terms of revenue and adjusted EBITDA in H1 2024?

MGM COTAI recorded revenue of HK$9.5 billion and an adjusted EBITDA of HK$2.8 billion in the first half of 2024.

What was the average occupancy rate for MGM China properties in the first half of 2024?

The average occupancy rate for MGM China properties was 93.9% in the first half of 2024, compared to 91.7% in the same period of 2023.