MGM Resorts Withdraws 2020 Forecast Blaming Coronavirus
MGM Resorts International has said that its CEO Jim Murren will step down, and has withdrawn its financial forecast for 2020 as it assesses how the coronavirus epidemic will impact operations. Weal...
MGM Resorts International has said that its CEO Jim Murren will step down, and has withdrawn its financial forecast for 2020 as it assesses how the coronavirus epidemic will impact operations.
Wealthy Chinese patronage at Macua and Las Vegas make up a good chunk of business and the virus has clamped down travel and closed companies across China.
MGM said that it suspended operations at its two properties in Macau for a government mandated 15-day period, which started on February 5 to prevent the spread of the infection locally.
MGM added that it was difficult to weigh the fallout of the epidemic on its business as the suspension could be extended and customer traffic could fall further at its properties.
"Although the outbreak has been largely concentrated in China, to the extent that the virus impacts the willingness or ability of customers to travel to the company's properties in the US, the company's domestic results of operations could also be negatively impacted," MGM said.
In Macau, the company said that it is posting approximately $1.5 million in operating expenses daily across both properties, as it kept some non-gaming operations running to support hotel guests.
The epidemic has taken a toll on casino operators as travel restrictions and fear of the virus spreading have led to cancellations of trips in the Far East.
Hopeful There Will Be No Long-Term Impact
"While the coronavirus will clearly have a near-term impact to MGM China, we remain confident that it will not have a long-term impact on our business," the outgoing CEO said on a post-earnings call with analysts.
Murren, who will step down before completing his contract, will remain CEO and chairman until a successor is named.
Murren, who has been at MGM since 1998, has been chairman and CEO since 2008.