MGM Resorts CEO Bill Hornbuckle noted that the company is proceeding as planned for its Osaka IR bid in Japan. Hornbuckle calls the Asian market a “huge upside for the company”.
MGM Resorts Follows Their Plan for the IR bid in Japan
Bill Hornbuckle, CEO of MGM Resorts, confirmed that the company is still going ahead as planned with the Osaka IR bid in Japan. Back in February, MGM Resorts remained the single company in the race to submit a bid for an integrated resort in Osaka.
During an earnings call on Friday, May 1, covering the results from Q1, 2020, the question was raised whether MGM would continue its plan to expand into the Asian market. Hornbuckle replied that despite the global impact of COVID-19, the company saw Asia as a “huge upside” and wished to proceed as planned. In his words:
We’re very bullish on Macau in the long run and we’re absolutely bullish on Japan in the long run. We’re still in the zone of a US$10 billion investment and the returns on that will be determined once we get through all the regulations“.
Further to MGM’s call on Friday, the company noted a reduced monthly cashflow of $270 million, occasioned by the fact that all venues in the United States remain closed.
Delays Can be Expected Due to Novel Coronavirus
The RFP process for the IR in Japan is expected next year between January and June. This timeframe, however, can be influenced by the recent novel coronavirus pandemic and the additional 25 days of emergency that Japan implemented.
According to Hornbuckle recent events will only slow down the process. He noted: “We are not definitively sure of the RFP process as it currently sits in Osaka but we are ready for this. We have an RFP submission (in Osaka) that is due at the end of July. Our team has worked hard on this and as you know we’re the lone standing applicant there“.
He continued that MGM would submit the documents but the process would likely be pushed towards the end of the year. Hornbuckle assured that MGM will be ready regardless any delays in the RFP process.
Revenue Decline for Q1 – MGM China
MGM China saw drop in revenue in Q1, 2020. In January, the company reported $207 million in net revenue, but that amount fell dramatically to $15 million in February. The heady drop reflected the suspension of all casino operations during the two-week lockdown in Macau back in February.
Hornbuckle commented on the subject: “The year started strong with results ahead of expectations, however the COVID-19 pandemic resulted in the closure of our properties which had a material negative impact on our first quarter results“.
He further noted that MGM is likely to recover just as quickly in Las Vegas as in Macau. Hornbuckle also did not miss to mention that the company is doing its best to keep its liquidity position and manage cash outflows. A key objective for MGM Resorts remains the IR project in Osaka, Japan as well as further growth in Macau.