MGM China sees revenues drop 63% in 1Q20

Operators reports revenues of US$272 million for the first three months of the year.

Macau.- MGM China has revealed a 63% YoY decrease in 1Q20 revenues to US$272 million in the first quarter of the year, due mostly to the Coronavirus crisis.

MGM China said that its Macau properties alone are incurring cash operating expenses, exclusive of rent, interest, variable gaming taxes, corporate expense and expected capital expenditures, of approximately US$1.5million per day.

Adjusted Property EBITDA generated during the period also dropped from US$193million in the first quarter of last year to a US$22million loss in the first three months of 2020.

Macau casino operators were forced to suspend operations for 15-days from February 5 as part of measures to prevent the spread of Covid-19.

While casinos have now reopened, travel restrictions between Macau, Hong Kong and certain cities and regions in mainland China remain in place and are negatively impacting visitor numbers.

MGM also raised concerns about labour costs.

“We compete with a large number of casino resorts for a limited number of employees and we anticipate that such competition will grow in light of the opening of new developments in Macau,” the operator said in a statement.

“While we seek employees from outside of Macau to adequately staff our resorts, certain Macau government policies limit our ability to import labour in certain job classifications.

“For instance, the Macau government requires that we only hire Macau residents as dealers in our casinos and any future government policies that freeze or cancel our ability to import labour could cause labour costs to increase”.