MGM China Holdings Ltd, one of Macau's biggest casino operators, recently reported third-quarter earnings, representing a 6% drop in net profit compared to last year. MGM Resorts International's (MGMRI) China division had a third-quarter net profit of $529 million, but that number fell to $500 million this year.
The earnings were reported as part of parent company MGMRI's consolidated report, which became the operator's majority shareholder after several acquisitions of the shares. Unlike its Chinese subsidiary, however, MGMRI's casino net sales are up 8% this year, reaching $1.3 billion.
However, while third-quarter net profit declined, MGM China's Adjusted EBITDA increased 17% this year to $150 million, which the company believes is a direct result of its quality "stock business." But it's interesting to note that while third-quarter adjusted EBITDA increased, nine-month EBITDA decreased to $383 million, as opposed to 2015 when it reached $408 million. This is certainly not the case for domestic operations that delivered the highest adjusted EBITDA since 2007, bringing in a total of $570 million in the third quarter alone.
MGM China also saw its holdings fall along with a decline in net sales, falling from 3.7% in 2015 to 3% in 2016, VIP sales fell 14%, resulting in a 26% drop in VIP table game sales, while floor table game sales increased 21% in 2016.
MGM China is operating only one casino resort in the market while building the MGM Kotai Resort, which is scheduled to open in the second quarter, but only one called the MGM Macau Grand Casino Resort.