LAS VEGAS (KLAS) — MGM Resorts International reported a consolidated operating loss of $1 billion for the second quarter of 2020. Operating income for the same quarter in 2019 was $319 million.
An MGM news release stated a “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.”
The numbers for Nevada’s largest employer included the news that Mandalay Bay is the only Las Vegas property that is not turning a profit since reopening. The company has brought back less than half its workforce to this point, an official said during the second quarter conference call.
Chief Executive Officer and President Bill Hornbuckle — newly appointed to the role he has been serving in since March — said the MGM is holding a strong financial position despite the loss and attributes MGM’s success to:
- The MGM 2020 plan for reducing costs, which will produce savings of $450 million. The plan was in place even before COVID-19 struck.
- The company’s proven ability to adapt quickly.
- The high quality of MGM’s assets and expertise.
- MGM’s employees, who despite the challenge of COVID-19 have provided exceptional customer service, Hornbuckle said.
- An “amazingly strong” balance sheet that boasts $8.1 in liquidity as of June 30 and $11.4 billion in debt.
MGM reported $290 million in revenue during the second quarter, down 91 percent from 2019. That translates to a loss of $1.67 compared to earnings of $0.08 per share in the second quarter of 2019.
MGM Chief Financial Officer Corey Sanders said drive-in tourism — such as tourists from Los Angeles who drive to Las Vegas — has been very strong and has surpassed expectations of “pent-up demand” as gamblers look to return to casinos.
MGM’s financial picture is heavily reliant on China, but most financial analysts on the conference call were asking about Las Vegas. Since June 4, MGM has opened Bellagion, Aria, Vdara, MGM Grand, The Signature at MGM Grand, Mandalay Bay, Delano Las Vegas, New York New York, Luxor and Excalibur. The properties that remain closed are: The Mirage, Park MGM.
Officials said they are focused on reopening only amenities with high profit margins, and that approach is unlikely to change. MGM is also focused on bringing back its MLife customers — members of the company’s rewards program — because they are viewed as “high quality” customers who visit 3-5 times more often than other customers.
An exception to the savings strategy — MGM has invested heavily in its online gaming operations, investing $200 million while resorts have been closed. BetMGM is growing, and online gaming has shown some positive signs, gaining market share on the East Coast and positioned to produce $130 million in revenue by the end of 2020.
Restrictions continue to hamper profitable operations, including T-Mobile Arena and entertainment venues. Timetables for reopening those facilities depend on government restrictions at this time. Hornbuckle said some entertainment offerings — comedians and other small shows — could come back as soon as a week after restrictions change.
But bigger shows, like the world-famous Cirque Du Soleil, would take at least three weeks to ramp up.