Gaming operator MGM China indicated in a recent filing to have reported some HK$346.1 million (US$43.3 million) in expenses for April, more than double the HK$122.5 million in operating revenues generated in the same month.
In a filing with the Hong Kong Stock Exchange, MGM China indicated that the expenses incurred in cash operating expenses, exclusive of rent, interest, variable gaming taxes and expected capital expenditures are significantly in excess of amounts being earned at its MGM Macau and MGM Cotai properties.
As with other gaming concessionaires, the Covid-19 pandemic had a significant impact in MGM China’s operations this year, with the group’s operating revenues and Adjusted EBITDA going down 63.3 per cent and 107.6 per cent year-on-year, respectively, in the first three months of 2020.
Room occupancy rates at MGM Macau and MGM Cotai also dropped to 44.0 per cent and 33.2 per cent in the first quarter.
In the current operating environment, MGM China estimated monthly cash outflows of approximately HK$505.7 million, including run-rate operating costs of approximately HK$318.8 million, development and maintenance capital expenditures of approximately HK$107.2 million and interest expense at around HK$79.7 million.
‘We have undertaken a series of actions to minimize our expenses, including reducing or deferring of capital expenditures that we had planned to begin during the second quarter of 2020, and reducing payroll expenses, including limiting staff on site, implementing a hiring freeze and organizational change and introducing voluntary unpaid leave,’ the group stated.