Mohegan cuts losses as revenue jumps 28.7% in Q2
Total revenue for the three months to 31 March 2022 was $358.5m (£293.4m/€344.8m), up from $278.6m in the corresponding period last year, with revenue up in all areas of the business.
Gaming revenue climbed 25.0% year-on-year to $261.5m, while food and beverage revenue rocketed by 117.3% to $28.9m, hotel revenue increased 44.8% to $24.9m, and retail, entertainment and other revenue was up 11.1% to $43.2m.
Breaking down revenue by each business segment, the Mohegan Sun Casino and Resort in Connecticut generated $215.5m in revenue, an increase of 14.0% on last year. Revenue at the Mohegan Sun Pocono in Pennsylvania also jumped 18.7% to $62.2m.
Revenue from the MGE Niagara Resorts Canadian segment hiked by 278.3% to $52.3m, despite land-based casinos in Ontario having been forced to close for 21 days in January in line with local novel coronavirus (Covid-19) measures. Casinos reopened at 50% capacity on 31 January, with these lifted on 17 February and all other measures removed on 1 March.
Elsewhere, management development and other revenue declined 23.1% to $15.6m, while all corporate revenue was down 90.6% to $241,000. Other revenue, reflecting the Mohegan Sun Las Vegas property in Nevada and MGE Digital online casino and sports betting operations, reached $13.3m in Q2.
Turning to costs and operating expenses were 28.7% higher at $301.0m. However, due to the increase in revenue this left an increased operating profit of $57.5m, up 28.1% year-on-year.
MGE also noted $60.2m in other expenses, primarily due to $52.3m in interest costs, which left a pre-tax loss of $2.7m, an improvement on the $19.2m loss posted at the same point in 2021.
The operator recovered $276,000 in income tax benefits, meaning net loss for the quarter was $2.8m, an 82.6% reduction from the $16.0m loss recorded in Q2 of last year.
However, MGE also recorded $342,000 in losses attributable to non-controlling interests, as well as $8.4m worth of negative foreign currency translation, which meant comprehensive loss for the quarter was $11.2m, though this was still a significant improvement from a $26.5m loss in the previous year.
In addition, MGE said adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased 7.4% year-on-year to $86.7m for the quarter.
“Our consolidated adjusted EBITDA of $86.7m reflects our strong performance and ongoing focus on profitability,” MGE chief executive Raymond Pineault said.
“Although visitation was somewhat impacted by the omicron variant and poor weekend weather at our northeast properties early in the quarter, the consolidated adjusted EBITDA margin of 24.2% was 234 basis points higher than the pre-Covid comparable fiscal 2019 quarter.”
Chief financial officer Carol Anderson added: “These results demonstrate MGE’s ability to adapt to the ongoing Covid-19 pandemic and reflect the current stabilising operating environment.
“We have reintroduced some lower margin non-gaming amenities since the prior-year period, and last year also included temporary reductions in labour, marketing and entertainment expenses as well as deferred operating expenses that were necessary to operate within the early phases of the Covid-impacted environment.”
Publication of the results comes after it was announced last week that Kambi will provide MGE’s PlayFallsview brand with its online sportsbook technology when it launches in Ontario.
Mohegan will launch a betting and gaming brand in Ontario, named after its Fallsview casino resort. The sportsbook for this brand will be provided by Kambi, featuring its ice hockey and bet builder products.