Thursday, April 25, 1996 | 11:59 a.m.
MGM Grand Inc. said today that record revenue and lower operating costs fueled a 527 percent jump in first-quarter earnings.
Net income soared to $34.5 million, or 70 cents a share, from $5.5 million, or 11 cents a share, in the 1995 first quarter, MGM said. Revenue rose 29 percent to $209.3 million from $161.9 million.
The per-share results would have been 7 cents higher except for renovation expenses at MGM's Australian casino, executives said.
They also said details of MGM's $250 million renovation -- dubbed "City of Entertainment" -- will be disclosed at the company's annual meeting May 7. And they said MGM is pursing aggressive expansion plans around the world.
First-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $65.9 million from $34.9 million in the 1995 quarter, an 89 percent increase. MGM's EBITDA margin rose to 31.5 percent from 21.6 percent.
Record table-game activity and room revenue at the MGM Grand in Las Vegas helped propel the improvements. Hotel occupancy climbed to 93.3 percent in the 1996 first period from 87.5 percent in the year-earlier quarter.
Alex Yemenidjian, MGM president, said overall table-game drop was flat, but was up 22 percent if baccarat results are excluded.
"Even though baccarat will remain a very strong component of our business, it will go down in percentage of revenue, though not in actual dollars," he said.
"I wouldn't be surprised if we do more baccarat business than either Mirage or Caesars Palace. We're much more selective in dealing with the high end of the market and have reduced volatility through reduced limits and reduced credit advances."
Yemenidjian said per-share earnings would have been 7 cents higher in this year's first quarter if costs associated with the company's Darwin, Australia, casino project were excluded.
Chairman Terry Lanni said MGM will unveil details of its 30-month, $250 million master plan to transform the Las Vegas resort into a "City of Entertainment" on May 7.
"We'll begin construction about the middle of June and continue for about 30 months. We could do it more quickly, but we're sensitive to potential disruptions."
Lanni also said MGM is eyeing growth opportunities around the world.
"I didn't join this company for the purpose of overseeing one property. We are pursuing expansion projects nationally and internationally very aggressively. We have substantial interest in Canada, Mexico, Argentina and South Africa."
In addition to the the MGM Grand, the company owns the hotel-casino in Australia and a 50 percent interest in New York-New York, a joint venture with Primadonna Resorts scheduled to open in December.
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