MGM China Holdings Ltd. (2282), a Macau casino venture between MGM Resorts International (MGM:US) and casino mogul Stanley Ho’s daughter Pansy Ho, posted a 9.7 percent rise in first-quarter profit as mainland visitors spent more.
Adjusted property earnings before interest, taxes, depreciation and amortization, or property Ebitda, increased to $180.5 million from $164.5 million a year earlier, according to the U.S.-based parent’s filing on PR Newswire. That compares with the median estimate of $182 million from four analysts surveyed by Bloomberg News.
Net revenue at MGM China for the quarter ended in March rose 6 percent to $748 million, MGM International said.
The company has only one casino in Macau and faces rising competition as bigger rivals expand. Sands China Ltd. (1928), Galaxy Entertainment Group Ltd. and Melco Crown Entertainment Ltd. (6883) are adding new resorts to lure more gamblers from China’s mainland.
MGM China broke ground on Feb. 27 on its first resort on Cotai, a piece of reclaimed land in Macau envisioned as Asia’s equivalent of the Las Vegas strip.
Casino revenue in Macau, the only place in China where casino gambling is legal, raked in $38 billion casino revenue last year, six times that of Las Vegas strip. Deutsche Bank AG estimated casino revenue will rise 17 percent to $44.5 billion this year.
MGM China fell 2.2 percent to HK$17.90 at the close of Hong Kong trading, before the earnings announcement. The stock has climbed 28 percent this year, outperforming the benchmark Hang Seng Index’s 0.05 percent gain.
Turnover at MGM China’s VIP-room gambling tables rose 15 percent from a year earlier, volumes increased 26 percent for main-floor tables and 19 percent for slot machines, MGM said in the filing. The unit had operating income of $99 million compared with $68 million a year earlier, it said.
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