MGM CHINA(HK:02282)2023-03-29 12:37Financial Performance - MGM China Holdings Limited reported a total revenue of HKD 5,268,569,000 for the year ended December 31, 2022, a decrease of 44.5% from HKD 9,410,814,000 in 2021[2]. - The company experienced an operating loss of HKD 3,609,542,000 in 2022, compared to an operating loss of HKD 2,348,629,000 in 2021, reflecting a deterioration in performance due to ongoing COVID-19 impacts[2][3]. - The net loss attributable to shareholders increased from HKD 3,846,616,000 in 2021 to HKD 5,231,911,000 in 2022, representing a 36% increase[3]. - The company's EBITDA adjusted for non-recurring items was reported at HKD (1,274,355,000) for 2022, compared to HKD 187,176,000 in 2021[2]. - Casino revenue for 2022 was HKD 4,438,995,000, down 46.0% from HKD 8,223,054,000 in 2021[4]. - The company did not declare any interim or final dividends for the year ended December 31, 2022[3]. - The company reported a loss attributable to shareholders of HKD 5,231,911 for the year ended December 31, 2022, compared to a loss of HKD 3,846,616 for the year ended December 31, 2021[84]. - The adjusted EBITDA for the year ended December 31, 2022, was a loss of HKD 1,274,355, compared to a profit of HKD 187,176 for the year ended December 31, 2021, indicating a significant decline[84]. Assets and Liabilities - As of December 31, 2022, total assets amounted to HKD 31,209,496,000, an increase from HKD 28,439,575,000 in 2021[6]. - Cash and cash equivalents increased significantly to HKD 6,706,591,000 in 2022 from HKD 3,112,020,000 in 2021, indicating improved liquidity[6]. - Total liabilities rose to HKD 35,205,917,000 in 2022, up from HKD 27,242,659,000 in 2021, reflecting increased borrowing[8]. - The company's total financing costs increased to HKD 1,665,261,000 in 2022 from HKD 1,383,508,000 in 2021, representing a rise of about 20.3%[6]. - The company's trade receivables decreased to HKD 239,522,000 in 2022 from HKD 269,712,000 in 2021, a decline of approximately 11.2%[32]. - The company’s total borrowings as of December 31, 2022, were HKD 32.7251 billion, up from HKD 23.9291 billion as of December 31, 2021[116]. Gaming Operations - The company operates two major integrated resorts in Macau, MGM Macau and MGM Cotai, with a total gaming floor area of approximately 47,832 square meters and over 1,860 gaming machines[55][56]. - The total win from main gaming tables for the year ended December 31, 2022, was HKD 4,472,426, down 40.4% from HKD 7,506,977 for the year ended December 31, 2021[90]. - The total win from VIP gaming tables decreased to HKD 580,773, a decline of 72.5% from HKD 2,112,353 for the year ended December 31, 2021[90]. - The total win from slot machines was HKD 525,152, down 42.5% from HKD 911,598 for the year ended December 31, 2021[90]. - The company's gaming revenue composition shows a shift towards the mid-to-high-end market, with mass market and VIP segments accounting for 90% and 10% of gaming revenue respectively as of December 31, 2022, compared to 80% and 20% in 2021[77]. Market and Strategic Developments - The company is optimistic about long-term growth in the Macau market due to infrastructure improvements and increased tourism from mainland China[71]. - The company has suspended its VIP business with major gaming intermediaries since December 2021, affecting past revenue contributions[75]. - The Macau government is promoting the region as a safe and high-quality travel destination, which is expected to boost tourism[71]. - The company plans to enhance the gaming experience for mid-to-high-end customers through renovations and dedicated gaming areas[73]. - The company aims to redesign and upgrade its facilities to enhance non-gaming offerings in entertainment, arts, gastronomy, and wellness tourism[69]. Regulatory and Compliance - MGM Cotai has been granted a gaming license by the Macau government, effective from January 1, 2023, to December 31, 2032, allowing operation of 750 gaming tables and 1,700 electronic gaming machines[11]. - The minimum capital requirement for gaming operators has increased to MOP 5 billion (approximately HKD 4.85 billion) from MOP 200 million (approximately HKD 194 million)[12]. - The company is required to pay a special gaming tax of 35% on gross gaming revenue and an annual fixed premium of MOP 30 million (approximately HKD 29.1 million) for each reserved gaming table[60]. - The company has complied with all provisions of the corporate governance code as of December 31, 2022[134]. - The company is committed to maintaining compliance with international financial reporting standards in its financial disclosures[142]. Cost Management and Operational Efficiency - The company reduced or postponed several planned capital expenditures and decreased wage expenses in response to COVID-19[18]. - The company achieved a significant reduction in advertising and promotion expenses, which fell to HKD 220,501 thousand in 2022 from HKD 390,970 thousand in 2021[26]. - The company has implemented cost-reduction measures, including deferring capital expenditures and reducing wage expenses, in response to the financial impact of COVID-19[66]. - The company plans to continue focusing on market expansion and new product development to recover from the impacts of COVID-19[85]. Legal Matters - The company is involved in legal proceedings related to cash deposits made by gaming intermediaries, with a total payment obligation of HKD 80 million plus interest of HKD 37 million as of December 31, 2021[52][53]. - The company reached a final settlement regarding several lawsuits related to joint liability with gaming intermediaries, reversing a previously recorded liability of HKD 60.6 million[53]. - The group has estimated a liability of HKD 202.7 million related to ongoing legal claims against it[114]. Future Outlook - The company aims to create a "Cultural and Arts Business Incubation Base" to foster a diverse tourism ecosystem in Macau[80]. - The company is developing a new multimedia space at MGM Cotai that will integrate art and entertainment experiences with extended reality (XR) interactive technology, set to launch in 2024[81]. - The company continues to develop the "MGM 2049" residency show in collaboration with renowned Chinese director Zhang Yimou, with technical upgrades planned for the MGM Theater[81].