Solid Market Share Gain
Awarded 10-Year Macau Gaming Concession Contract
Positioned for Market Recovery
HONG KONG, Feb. 8, 2023 /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 the three months and 12 months ended December 31, 2022 (the “Year”).
Macau and Greater China were under the adverse impact of the COVID-19 pandemic in 2022. Related travel restrictions including tightened safeguard measures and border controls have severely weakened the city’s visitation. Macau visitor arrivals was down by 26% year-on-year to 5.7 million, compared to 7.7 million in 2021 and a record 39.4 million in 2019. Visitation from mainland China declined by 28% year-on-year to 5.1 million in 2022.
As a result, market-wide gross gaming revenue (GGR) was down 51% year-on-year to MOP42.2 billion, approximately 14% of pre-pandemic level in 2019. Operations were temporarily suspended including casino closures at both our properties at certain times during the Year as a result of pandemic outbreak in Macau.
During the Year, MGM China had net revenue of approximately HK$5.3 billion, compared to HK$9.4 billion previously. The Group recorded negative adjusted EBITDA of approximately HK$1.3 billion, compared to adjusted EBITDA of approximately HK$187 million previously. Occupancy was 34.1% in 2022 compared to 57.2% in the 2021.
MGM China continued to outperform the market despite the market weakness. The Group’s daily GGR in 2022 was 21% of 2019 level, higher than the market’s performance. Market share grew further to record-high of 13.7% in 2022, from 12.5% in 2021 and 9.5% in 2019 pre-pandemic time.
The Group maintained a healthy financial position. As of December 31, 2022, the Group had total liquidity of approximately HK$13.9 billion, comprised of cash and cash equivalents and undrawn revolver.
The Group was grateful for the team’s effort in achieving the outperformance. It also demonstrated our strategic efforts in:
casino floor renovation to retain critical mass of players;
full hotel product mix including Emerald Villa and The Mansion tailored for high-end players;
various marketing efforts in producing quality programs, exhibitions, calendar of events and promotions to attract new visitors and players; and
continued improvements in service levels and operation efficiency.
In December, MGM Grand Paradise Limited (“MGM Grand Paradise”) was awarded the new 10-year gaming concession contract, effective January 1, 2023. Under the gaming concession, MGM Grand Paradise is entitled to operate a total of 750 gaming tables and 1,700 slot machines, compared with 552 gaming tables and 1,701 slot machines previously. Along with our effort and commitment in enhancing customer experience, we look forward to further growth in the market.
In November, electronic applications of individual and group travel visas to Macau for mainland China residents resumed while other travel restrictions started to substantially eased in December. Mandatory isolated quarantine for all inbound visitors was scrapped, followed by cancelation of nucleic acid test requirement for visitors from mainland China, Hong Kong and Taiwan as well as Hong Kong-Macau ferry resumption in January this year. These paved the way for a recovery for Macau.
The total visitor arrivals have significantly increased in January. The daily average Macau visitation during Chinese New Year (CNY) increased to over 64,000 for January 21-27, compared to the average of approximately 14,500 in fourth quarter last year. Visitation hit over 90,000 on January 24 or the third day of CNY.
The ease of travel restrictions to Macau also boosted the market GGR. GGR more than tripled month-on-month or jumped 83% year-on-year to MOP11.6 billion in January.
Kenneth Feng, President, Strategic & Chief Financial Officer of MGM China said: “We are excited to see a market rebound in 2023 as our guests are returning in force. The relaxation of travel restrictions and the entertainment events organized during CNY resulted in strong visitation to Macau and our properties. We see the encouraging results as validation in our confidence in the Macau market’s recovery and long-term viability upon which our retendering commitments are built.
“As we look beyond the strong January and CNY, we are highly confident in the trajectory for Macau and MGM China. We will stay dedicated to fulfilling our commitments to the Macao SAR government, demonstrate further strength in the integrated tourism and leisure industry and continue to make contributions to Macau,” 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.
SOURCE MGM China