MGM Resorts International says it is implementing aggressive cost-saving initiatives to weather the COVID-19 crisis, after its properties across the United States were closed.
Since March 16, all of the company’s properties across the United States have been temporarily closed to the public and has also experienced a high number of group cancellations.
In addition, while the Company’s Macau properties are now open, visitation remains at low levels and travel constraints continue to impact the market.
While clocking strong results in January and February, the company says it has incurred substantial operating losses in March and does not expect to see a material improvement until more is known regarding the duration and severity of the pandemic, including when the company’s properties can re-open to the public.
As a result, the company said it is now making swift decisions to significantly reduce expenses to protect its financial position.
It estimates that around 60-70 percent of its domestic property operating expenses are variable, and will be taking steps to minimize these costs, such as the implementation of hiring freezes, furloughs and other headcount reductions.
The company is also actively reviewing its fixed property-level operating expenses and corporate expenses to identify opportunities to further drive expense reductions.
“The Company believes its strong liquidity position, valuable unencumbered assets and aggressive cost reduction initiatives will enable it to fund its current obligations for the foreseeable future. While the Company is unable to predict when the properties will re-open, the Company continues to believe that it will be able to weather this downturn and ultimately rebound from the impacts of the current crisis.”