MGM Resorts International (MGM) has reported a 706.35 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $535.62 million, or $0.93 a share in the quarter, compared with $66.42 million, or $0.12 a share for the same period last year.
Revenue during the quarter grew 10.27 percent to $2,515.12 million from $2,280.82 million in the previous year period. Gross margin for the quarter expanded 122 basis points over the previous year period to 90.71 percent. Total expenses were 71.66 percent of quarterly revenues, down from 86.96 percent for the same period last year. This has led to an improvement of 1530 basis points in operating margin to 28.34 percent.
Operating income for the quarter was $712.76 million, compared with $297.38 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $662.44 million compared with $525.75 million in the prior year period. At the same time, adjusted EBITDA margin improved 329 basis points in the quarter to 26.34 percent from 23.05 percent in the last year period.
"MGM Resorts produced a tremendously strong quarter, delivering the best net revenues and Adjusted Property EBITDA at our domestic resorts since 2007. These results demonstrate the broad based commitment and contributions of the MGM Resorts team in executing the Company’s strategic plan and delivering value to our shareholders," said Jim Murren, Chairman & CEO of MGM Resorts. "We have executed on numerous opportunities this year, strengthening our organization, improving our balance sheet, and positioning the Company for growth. The complexity and scale of our organizational transformation is unprecedented in our industry and has manifested itself into our superior operating performance. Looking ahead, we remain focused on organic growth through a stronger, reinvigorated Company driven by our culture of continuous improvement and are committed to expanding our distinguished brand with the opening of MGM National Harbor and the Park Theater in Las Vegas next month."
Working capital drops significantly
MGM Resorts International has witnessed a decline in the working capital over the last year. It stood at $83.71 million as at Sep. 30, 2016, down 86.70 percent or $545.71 million from $629.42 million on Sep. 30, 2015. Current ratio was at 1.04 as on Sep. 30, 2016, down from 1.32 on Sep. 30, 2015.
Cash conversion cycle (CCC) has increased to 83 days for the quarter from 82 days for the last year period. Days sales outstanding went down to 18 days for the quarter compared with 20 days for the same period last year.
Days inventory outstanding has decreased to 19 days for the quarter compared with 40 days for the previous year period. At the same time, days payable outstanding went down to 120 days for the quarter from 141 for the same period last year.
Debt remains almost stable
Total debt of Mgm Resorts International remained almost stable for the quarter at $12,786.42 million, when compared with the last year period. Long-term debt of Mgm Resorts International remained almost stable for the quarter at $12,786.42 million, when compared with the last year period. Total debt was 46.15 percent of total assets as on Sep. 30, 2016, compared with 48.05 percent on Sep. 30, 2015. Debt to equity ratio was at 1.29 as on Sep. 30, 2016, down from 1.39 as on Sep. 30, 2015. Interest coverage ratio improved to 4.24 for the quarter from 1.55 for the same period last year.
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