At the end of Wednesday’s investors call on MGM Resorts’ fourth-quarter and full-year-2022 operating results, CEO and President Bill Hornbuckle closed with a mild boast.
“I would say, without any disparaging comments to our competitors, that as we think about the balance of our regional locations, Las Vegas, international, and digital, we’re the most well balanced and prepared for growth,” Hornbuckle said. “We have no net debt. We’re sitting on about $5.3 billion of cash liquidity. And since Jonathan (Halkyard, Chief Financial Officer and Treasurer) and I have joined in senior roles, the companies bought back over 25% of its shares and all of it on the back of an amazing team that we’ve put together here that’s got extensive experience over many decades and many different jurisdictions.
“To say I’m excited by our future would be an understatement.”
MGM reported revenue of $13.1 billion for 2022, an increase of 36% from 2021’s $9.7 billion. That amount includes operating results of the Cosmopolitan in Las Vegas after the completion of its acquisition in May, a full year of operation of Aria and Vdara, acquired in full in September 2021, and the results of the Mirage until its sale to Hard Rock International for $1.1 billion on Dec. 19.
Net income for 2022 was $1.5 billion compared to $1.4 billion the previous year.
Operating income for the year was $1.4 billion compared to $2.3 billion in 2021. The decrease was due to a $2.5 billion increase in noncash amortization expense of the MGM Grand Paradise gaming sub-concession;an increase of $1.1 billion in rent related to triple-net operating and ground leases due primarily to the Cosmopolitan, Aria, and VICI leases; partially offset by the $2.3 billion gain on REIT transactions, net, and the $1.1 billion gain on the sale of the Mirage in the current year. The decreas was also due to the prior-year results, including the $1.6 billion gain on consolidation of CityCenter, net.
MGM’s Las Vegas Strip properties reported revenue of $8.4 billion, a 77% year-over-year increase compared to 2021 revenue of $4.7 billion. MGM’s regional operations generated revenue of $3.8 billon compared to $3.4 billion in 2021, a 12% increase.
Noting the company’s joint venture with Entain in BetMGM and the possibility of expansion of that partnership globally, Hornbuckle was blunt. If the company is going to expand igaming globally, it will do so through LeoVegas. In August 2022, MGM announced that its public-tender offer for the shares of the Swedish online gaming company was accepted by 96% of LeoVegas shareholders at an approximate value of $604 million.
“No, we’ve moved on,” Hornbuckle said of Entain. “While we remain highly focused on BetMGM’s business through our partnership with their team and making sure that that business continues to grow, we see great potentially in LeoVegas’s expansion capabilities. I’ve said before we like their technology platform and leadership team. We’re also interested in the content studio business. We think there’s a real play there. We’ve seen that proven effective with brands when we combine great product and our brands at BetMGM, and over time, we like the live-dealer business and expansion of other global markets and, frankly and directly, under our own purview. So for now the answer is no, not with Entain. We’re going in our own direction.”
Hornbuckle added that there are no immediate plans for mergers and acquisitions, although there may be a few assets MGM would consider.
“I don’t think we have any immediate designs or plans or anything substantive sitting here today,” he said. “I think our growth will come through the development opportunities we’ve defined, the digital opportunities that we’ve defined today and are going to seek. We’ve always got an eye and an ear open, but there’s nothing specific.
“Not that I would actually tell you if there was.”
MGM Resorts stock closed at $41.43 on the New York Stock Exchange, a drop of 56 cents (1.3%). After hours, the stock rose $1.97 to $43.40, a 4.76% increase.
