Only several days following the official launch of its brand new property in Macau, MGM China Holdings Ltd. issued the official information regarding its profits throughout 2017 which attracted the interest of many people acquainted with the field. As listed in the reports the company has seen a net profit drop of 23 percent in comparison to its performance in 2016 and thus it became clear that the entity could not manage to meet previously-stated expectations of analysts.
In their predictions for the overall performance of the gambling operator for the year, 2017 many experts in the field claimed in a Reuters poll that the Hong Kong-listed company would generate as much as HK$2.4 billion, but this did not happen. Throughout the twelve months of 2017, MGM China managed to reach only HK$2.3 billion (US$294 million) which fell short of the forecasts, but also of the amassed net profits for the year 2016. It could be recalled that the posted net profits of the gambling developer reached HK$3.04 billion back then and there is a reason for that.
The jump resulted from the recognition of a deferred tax liability amounting to HK$317 million which could be related to subsidiary company MGM Grand Paradise. This is also the reason which was pointed out by the management of the company for the 2017 decrease of net profit. In the meantime, the gaming revenue reached HK$15.4 billion, marking a 3-percent surge year-on-year. According to the data from 2016, the gross gaming revenue of the company had amounted to HK$14.9 billion.
As for the revenue amassed throughout the last three months of 2017, when the gambling activity is usually at its highest, MGM China saw a 10.5-percent year-on-year growth and generated HK$4.28 billion around the holidays. In that time period, the gambling operator managed one property located on the Macau peninsula and that was MGM Macau. With the recent official launch of MGM Cotai, the 2018 profit reports are expected to grow even further, as this is the only property which the company oversees in the Cotai area.
Cotai Operation to Generate Larger Revenue
Currently, there are several well-known brands operating on the strip, to the likings of Sands China, Galaxy Entertainment Group, and Wynn Macau. The project is estimated to cost as much as HKD27 billion (US$3.4 billion) to its developers and is expected to bring fresh revenue to the casino developer.
Only a couple of days before the anticipated Chinese New Year and the lavish holiday period which is associated with the celebrations around it, the new gambling resort opened its doors to welcome its first guests. Since the Chinese New Year brings with itself a lot of tourists in the period from 15th to 21st February, all rooms which are in operation are already booked.
This is an already great performance for the location which expects a strong revenue inflow from the people participating in the festivities, as this time period is also associated with higher gambling activity among the guests.