MGM reports 91% drop in revenue in Q2 due to coronavirus-related closures

MGM Resorts International reported on Thursday its financial results for the quarter ended June 30, 2020.

According to the company's quarterly report, MGM's domestic operations achieved better than expected results since opening, despite the challenging environment the industry is currently facing as a result of COVID-19.

"During the second quarter, we began re-opening our properties across the U.S. and have been heartened by the better than expected demand in the marketplace. I am grateful to the men and women who continue to dedicate their efforts to re-opening our properties and welcoming our guests, safely, once again," said Bill Hornbuckle, CEO and President of MGM Resorts. "In addition, our MGM 2020 plan and modifications to our operating model have directly contributed to our margin improvements during the period in which our properties were open."

Consolidated net revenues decreased 91% compared to the prior-year quarter to $290 million, primarily driven by the temporary suspension of the company's domestic casino operations, continued travel restrictions in Macau, restrictions on the number of table games allowed to operate in Macau, and restrictions on the number of seats available at each table at both the Company's domestic and Macau properties, and other social distancing restrictions in place at these properties, including the number of slot machines available for use, property capacity restrictions, and venue/amenity limitations.

Consolidated operating loss was $1.0 billion compared to consolidated operating income of $371 million in the prior-year quarter.

Net loss attributable to MGM Resorts of $857 million compared to net income attributable to MGM Resorts of $43 million in the prior-year quarter.

Diluted loss per share of $1.67 in the current quarter compared to diluted earnings per share of $0.08 in the prior-year quarter. Adjusted diluted earnings per share was a loss per share of $1.52 in the current quarter compared to Adjusted EPS of $0.23 in the prior-year quarter.

Consolidated Adjusted EBITDAR loss of $492 million in the current quarter compared to consolidated Adjusted EBITDAR of $764 million in the prior-year quarter, primarily attributable to the temporary suspension of casino operations discussed above.

"As we look ahead, we believe the long term fundamentals of our business and the broader industry remain intact. However, the near term operating environment will remain challenging and unpredictable as COVID-19 case trends, health and safety protocols, and travel restrictions continue to heavily impact our business," Hornbuckle added. "We remain focused, flexible, and disciplined in navigating this evolving landscape while continuing to pursue our long term growth opportunities, supported by our strong liquidity position. As such, we remain excited about our integrated resort opportunity in Osaka, expanding our footprint in Macau, and positioning BetMGM as a leading player in the U.S. sports betting and iGaming markets."

"During the second quarter, we continued to take proactive steps to further bolster our already strong liquidity position by accessing the debt capital markets, amending our credit agreement to preserve access to our revolver, and causing MGP to redeem $700 million of MGM Resorts' operating partnership units for cash, under our agreement for MGP to redeem $1.4 billion of MGM Resorts' units. Furthermore, we continued to work aggressively to reduce operating and corporate expenses during the re-opening process while providing a safe and appealing environment for our employees and guests," said Corey Sanders, Chief Financial Officer and Treasurer of MGM Resorts. "Our domestic liquidity, excluding MGM China and MGP, is $4.8 billion, before factoring in any additional change in our stake in MGP."

Las Vegas Strip Resorts

On June 4, 2020, Bellagio, MGM Grand, and New York New York re-opened to the general public, followed by Excalibur on June 11, 2020, and Luxor on June 25, 2020. The balance of the company's Las Vegas Strip Resorts remained closed in the second quarter.

Net revenues decreased 90% compared to the prior-year quarter to $151 million as a result of the temporary closure of Las Vegas Strip properties and other operational restrictions related to the pandemic.

Regional Operations

The company's Mississippi operations, Gold Strike and Beau Rivage, re-opened to the general public on May 25, 2020, and June 1, 2020, respectively. MGM Northfield Park re-opened on June 20, 2020. MGM National Harbor re-opened to the general public on June 29, 2020, with the balance of the company's regional destinations remaining closed;

Net revenues decreased 90% compared to the prior-year quarter to $89 million as a result of the temporary closure of Regional Operations properties and other operational restrictions related to the pandemic.

MGM China

Net revenues decreased 95% compared to the prior-year quarter to $33 million as a result of ongoing travel and entry restrictions in Macau as well as other operational restrictions related to the pandemic.

See the company's full second-quarter financial and operating results here.