Dubai-linked MGM rides Vegas boom to profit

MGM Resorts International, the biggest casino operator on the Las Vegas Strip, reported better than expected second- quarter earnings as it took control of a Macau joint venture and a recovery strengthened in Nevada.Net income was $3.44bn, or $6.22 a share, boosted by a $3.5bn gain from consolidating Macau on its books. That compares to a loss of $883.5m, or $2 a share, a year earlier when earnings were hit by CityCenter development writedowns, the Las Vegas-based company said Monday.Macau is booming while Las Vegas stages a broad-based recovery from its steepest gambling and convention decline. Room rates have increased at most of MGM’s 10 Las Vegas Strip resorts and visitors are spending more on food and entertainment as tourists and conventions return. MGM took a controlling stake in its Macau joint venture in the quarter, consolidating onto its books a resort in the world’s biggest gambling market, where casino betting surged 58 percent last year and 45 percent in the six months ended June 30. Spending by tourists who book their vacations independently or online is strengthening faster than anticipated, adding to improved conventions and meetings where prices are higher and the pace of reservations has risen since last year, chairman and chief executive officer Jim Murren said today in a phone interview. “If you’re getting growth in the Luxors and Monte Carlos and New York New Yorks, that’s telling you that the US customer is spending more money,” Murren said. “That’s encouraging to us.”Revenue rose 17 percent to $1.81bn, beating the $1.61bn analysts expected. Second-quarter cash flow at wholly-owned casinos - measured as adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda - rose 7 percent to $331m. Resort Ebitda at the $8.5bn CityCenter joint venture of hotels, condominiums, a casino and mall on the Las Vegas Strip was $64m in the second quarter, on revenue of $275m. MGM and partner Dubai World opened CityCenter in December 2009. Ebitda from MGM’s Macau joint venture rose to $170m from $61m a year earlier as sales more than doubled, the company said. MGM took 51 percent control of the venture, MGM China Holdings, in June when partner Pansy Ho sold part of her stake in a $1.5bn Hong Kong initial public offering. From / Arabian Business News