Casino Earnings: Mandalay Profits Surge

04.09.2003, Lesen Sie hier den Bericht über «Casino Earnings: Mandalay Profits Surge».

Mandalay Resort Group announced record-setting second-quarter results Tuesday, a performance boosted by big increases in room rates at its Mandalay Bay, Luxor, Excalibur and Monte Carlo megaresorts, company executives said. Revenue per available room, the statistic Mandalay bosses favor for explaining the upside potential of their south Strip resorts, jumped at each property during the company's second quarter, which ended July 31. Most increases in room rates drop straight to the bottom line, Mandalay President and Chief Financial Officer Glenn Schaeffer said during a Tuesday afternoon conference call with industry analysts and investors . "Our second quarter markedly demonstrated the power of RevPAR in driving operating results at Mandalay Resort Group," Schaeffer said. Excluding one-time events, he said the quarter "represented the most money Mandalay Resort Group has ever generated." Mandalay Resort reported $42.3 million in net income, up 44.3 percent from $29.3 million in the 2002 second quarter.

Per-share income jumped 63.4 percent to 67 cents from 41 cents, an increase exaggerated by the company's repurchase of more than 8 million shares during last year's third and fourth quarters and this year's first quarter. Revenue was up 6.8 percent, to $644.8 million from $603.7 million. Operating cash flow was up 25.1 percent, to $135.8 million from $108.5 million. Mandalay's second quarter ended one month later than its competitors' quarters, and the company's guidance suggested that the third quarter is also looking good. Mandalay reported results after Tuesday's market close. The company's shares closed at $38.05, up 5 cents, or 0.13 percent. Schaeffer credited Mandalay Bay's convention center with helping to drive room rates up at the company's south Strip resorts. He predicted the scheduled early October opening of Mandalay Bay's retail wing and the completion of work on the property's new 1,122-suite tower around Thanksgiving would add momentum to the trend.

Schaeffer said the convention center benefited from the strength of the Las Vegas convention market, which has been capturing market share from other Western cities. The company's second quarter, which ended July 31, clearly signals Mandalay Resort's strong position and the power of the Strip, industry analysts said. "Mandalay's summer performance was very strong," Deutsche Banc casino industry analyst Andrew Zarnett said. "It gives a good look at the vitality of Las Vegas. Look at the economy and the anemic recovery since the war (in Iraq) ended, yet Las Vegas results seem to be getting better and better."

Pent-up demand from the war and prewar periods and improving demographics are the key reasons behind the Strip resurgence, he said, noting that big jumps in hotel room revenue fueled Mandalay's robust quarter. "What lies in front of this company is a bounty of free cash flow," Schaeffer said. "Believe in it. We sure do." Schaeffer noted the RevPAR jumps at Mandalay's key Strip properties, citing: Mandalay Bay, which generated $170 in revenue per available room, compared with $144 in last year's quarter. Luxor, $88 compared with $77. Excalibur, $67 compared with $60. Monte Carlo, operated by Mandalay Resort but ownership split with MGM Mirage, $93 compared with $84. Mandalay also amended its first-quarter results, lowering RevPAR results after discovering that revenue attributable to the convention center "were inadvertently included with room revenues," the company noted in a statement. "As a result, the company's previously reported 14 percent increase in RevPAR at Mandalay Bay for the quarter ended April 30, 2003 was actually 6 percent and that property's actual average room rate for the same period was $187 rather than topping $200, as previously reported," the statement said.

Mandalay announced plans to increase its quarterly dividend. The company paid its first-ever quarterly dividend of 23 cents per share on Aug.. 1, and announced plans to pay a 25 cents per share dividend Nov. 1 to shareholders of record Oct. 15. "Given the lucrative free cash flow yields we expect to realize, we can afford to be a dividend leader," Schaeffer explained.

Über Mandalay Bay Resort and Casino:

Das Hotel Mandalay Bay hat ein exotisch/asiatisches Thema ähnlich dem Mirage. Vor dem gewaltigen Hotelturm befindet sich eine schön angelegte Landschaft mit Palmen, Ruinen, Statuen und Wasserfällen. Auch die Ausstattung im Inneren ist beeindruckend: hohe Räume, viele Pflanzen, riesige Kronleuchter und schwere Teppiche. Der Poolbereich mit Sandstrand und Wellenbecken wurde mehrfach zur besten Poolanlage in Las Vegas gewählt.

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