South Korea casino resort contributes to Mohegan’s Q1 2024 performance

Lea Hogg 1 week ago
South Korea casino resort contributes to Mohegan’s Q1 2024 performance

The Mohegan Tribal Gaming Authority, trading as Mohegan Gaming & Entertainment, has reported a significant increase in its net revenues for the first quarter of 2024. The company’s financial performance was bolstered by the newly inaugurated Mohegan Inspire Entertainment Resort, a foreigner-only casino complex located in Incheon, South Korea.

For the three months ending March 31, 2024, the company reported net revenues of US$461.7 million, marking a 13.8 percent increase compared to the same period in the previous year. Despite this, the company’s adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) fell by 17.8 percent year-on-year to just under US$84.0 million. The net loss for the first quarter of 2024 was nearly US$46.1 million, a significant increase from the US$9.6 million loss reported a year earlier.

The company attributes the increase in net revenues primarily to the continued growth of Mohegan Digital and the revenue generated by Mohegan Inspire. Ari Glazer, who assumed the position of CFO on May 1, 2024, stated that the decrease in consolidated adjusted EBITDA was mainly due to operating costs associated with the opening of Mohegan Inspire and non-controlling interest adjustments at Niagara Resorts, a property the company operates in Canada.

Mohegan Inspire, which opened its non-gaming facilities on November 30, followed by its foreigner-only casino on 3 February had an official launch for the property on March 5. The resort boasts 1,275 hotel rooms, 11 restaurants, and a 15,000-seat arena.

Catalyst for revenue growth

In the first quarter of 2024, the Incheon casino resort recorded net revenues of US$35.9 million. However, the property’s adjusted EBITDA were negative at US$24.1 million, primarily due to opening expenses related to labour and marketing costs.

Joe Hasson, the newly appointed interim chief operating officer at Mohegan, stated during a conference call with analysts that Mohegan Inspire was still in its ramp-up phase. Despite this, he expressed satisfaction with the trends observed in April and May. He also noted that the company was encouraged by the ramp at Mohegan Inspire, which was occurring in both the casino and non-gaming segments of the business.

Hasson added that the company sees breakeven EBITDA on the near horizon on a month-to-month basis. He acknowledged that during the initial ramp, the company had to spend on labour and marketing, but he sees breakeven approaching in the immediate future.

The parent company announced that new amenities at Mohegan Inspire, including an innovative food court concept, a digital interactive art attraction, and an amusement arcade, are expected to open in the second quarter of 2024, with a few others following in the third quarter of the year.

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