MGM Growth Properties’ Q1 revenue and profit grow as Vici deal approaches

Revenue for the three months to 31 March for the business which, owns and leases the property of a number of MGM casinos such as the MGM Grand and Mandalay Bay, amounted to $201.9m (£155.0m/€186.3m). This was up up 3.9% from $201.9m in the corresponding period last year.

Rental revenue for the quarter increased 3.6% year-on-year to $195.1m, while ground lease and other revenue also climbed by 15.0% to $6.9m.

Turning to costs and total expenses for the three-month period were 8.0% higher at $73.9m, with spending up across all areas, with the exception of both ground lease and general and administrative.

Other costs were also 19.2% up to $9.3m, with $25.4m in income from an unconsolidated affiliate and $29.2m in gain on unhedged interest rates swaps more than offset by $63.8m in interest expense.

However, despite higher spending, pre-tax profit was 0.5% higher at $118.8m, while after excluding certain costs, the trust said adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) reached $253.6m.

MGP paid $2.3m in tax and also accounted for a $47.1m net loss from a non-controlling interest, which meant net income for the quarter amounted to $69.4m, up 16.4% year-on-year.

First-quarter growth comes on the back of a mixed 2021 for MGP, during which revenue was down 1.3% to $782.1m, but net profit rocketed by 170.0% to $205.5m.

MGP’s 2021 is still likely to be its final full financial year ahead of its scheduled acquisition by Vici Properties, the real estate investment trust spun off from Caesars Entertainment in 2017.

MGM Resorts International, which holds a controlling stake in MGP, reached an agreement in August of 2021 to sell the spun-off REIT MGM Growth Properties to Vici Properties for $17.2bn.