MGM Resorts International (NYSE:MGM) announced today that it is looking forward to establish a REIT (real-estate investment trust). The casino operator also announced its financial results for the third quarter.
The company reported it would contribute real estate associated with 10 of its properties to the REIT. The new company, named MGM Growth Properties LLC, will assume debt of about $4 billion that is expected to be refinanced with the proceeds of equity offerings and debt.
The Las Vegas company also reported that it privately submitted a filing with the SEC about a proposed IPO of MGM Growth Properties. Three regional casinos and seven Las Vegas resorts are included in the properties that the company is looking forward to contribute to the REIT.
In August, MGM reported that it has started a revamp that is intended to boost focus on streamlining businesses and increasing profits, though it didn’t disclosed any further detail at that time. The company anticipates the multiyear program will start paying off as early as the second half of this year.
The company said that MGM China’s sales plummeted by a third to $529 million in the latest quarter, as VIP table games sales plunged 39 percent and main floor table games sales plummeted 30 percent.
On overall basis, MGM announced earnings of $66.4 million, or 12 cents per share for the third quarter, as compared to a loss of $20.3 million, or 4 cents per share one year ago. Revenue plummeted 8.2 percent to $2.28 billion. Analysts surveyed by Thomson Reuters were looking for earnings of 4 cents a share on $2.3 billion in revenue.
Operating costs dropped 8.1 percent. Revenue at the company’s wholly owned domestic resorts jumped 4 percent to $1.6 billion, while revenue per available room surged 8 percent at MGM’s Las Vegas Strip resorts.
