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The London market has closed for the day, but on the left side of the Atlantic MGM Resorts International (NYSE:MGM) investors are having a party. MGM’s share price is up 8.58% in early afternoon trading to 24.995 following the company’s first quarter financial results. Yesterday MGM wowed its investors – and a whole lot of other people – by unveiling its plans for a massive expansion in Las Vegas that will literally change the face of the south end of the strip. In show business terms, yesterday’s announcement is called “a hard act to follow.” But MGM followed in style.
First Quarter Results
There is no reason to belabor the point. The results were fantastic, in large part due to the overwhelming success of MGM China, which generated $941 million in revenue, up a whopping 26% year-on-year. Compared to Q1 2013, EBITDA increased by 33% to a record $241 million. Operating income in China rose from $99 million to $165 million.
Overall, consolidated net revenue came in at $2.6 billion, up 12% from Q1 2013. Casino and room revenues were each up 13% at wholly-owned US resorts, including a 14% increase at its Las Vegas resorts alone.
The combination of successful operations and exciting expansion plans prompted Chairman and CEO, Jim Murren, to say, “We are executing on our strategy to drive customer loyalty by increasing incremental convention business to our properties mid-week, hosting the best events on the weekends, and continually bringing new and exciting capital initiatives to our properties. Our development projects are well underway as MGM Cotai, our second Macau property, is on schedule to open in early 2016 and we are preparing to break ground on MGM National Harbor, in Maryland this summer, where we expect to open in 2016.”
Impressive Plans
In addition to the foregoing, Murren unveiled plans for another first for Las Vegas, announcing the development of “The Park,” a neighborhood environment that will connect New York-New York, the Monte Carlo and a new 20,000 seat arena that is already in development.
Murren described the venture saying, “Beautiful public places are highlights of many of the world’s finest cities, and Las Vegas shouldn’t be the exception. The Park will be the first of its kind on the Las Vegas Strip and is an embodiment of MGM Resorts’ commitment to engaging guests through arts and innovation. To create this picturesque outdoor destination, we are literally taking down the walls and opening the doors at our resorts to develop a unique dining and entertainment district that complements its lush new surroundings.”
When complete, the park will offer plazas, promenades and squares as pedestrian thoroughfares and venues for relaxation. In addition to elegant landscaping design, high-tech lighting effects will illuminate The Park in the evening in a style that takes Las Vegas glamour to a new level. The Park will feature natural landscaping whilst incorporating a variety of micro-climates for visitors to enjoy whilst they wend their way from elegant dining and shopping to tasting fine wines and sampling gourmet sandwiches.
In addition to New York-New York and Monte Carlo, the second largest resort company in the world also owns MGM Grand, Bellagio, Mandalay Bay and the Mirage in Las Vegas.
