MGM Resorts International's (MGM) third-quarter loss narrowed
amid sharply lower write-downs related to its struggling Las Vegas
City Center complex.
The casino operator in the latest quarter posted a combined $357
million in write-downs related to the City Center complex and the
planned sale of its 50% stake in the Borgata Hotel Casino & Spa
in Atlantic City, N.J. A year earlier, City Center related
write-downs were $1.17 billion.
Chairman and Chief Executive Jim Murren said, "We continue to
see the Las Vegas market stabilizing, Aria's operating performance
is ramping up, and MGM Macau reported a record quarter."
MGM and Dubai World, joint owners of the massive City Center
casino complex opened last December in Las Vegas, are still
scrambling to figure out how to fix the $8.7 billion project's
financial problems. They have studied closing two of the site's
three hotels, according to the Wall Street Journal, and have
outlined a plan to seek relief on terms of the complex's $1.8
billion loan. If the terms can't be renegotiated, City Center could
be in default as soon as the middle of next year.
Between Jan. 1 and Sept. 30, MGM reported, City Center had a net
loss of nearly $1 billion, including $600 million in write-downs.
Meanwhile, revenue at most of MGM's other casinos weakened this
year.
The company reported a third-quarter loss of $318 million, or 72
cents a share, compared with a prior-year loss of $750.4 million,
or $1.70 a share. Write-downs totaled 51 cents and $1.72,
respectively.
Net revenue increased 1.6% to $1.72 billion as casino revenue
dropped 9.4%. But excluding reimbursed costs revenue mainly related
to the company's management of City Center, net revenue fell
3%.
The company last month said revenue per available room, an
important lodging industry measure of performance, fell 2% at its
Las Vegas Strip properties amid lower occupancies and flat average
daily rates.
Shares closed Tuesday at $11.15 and were inactive premarket. The
stock is down 22% this year amid the company's weak performance in
recent quarters.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com