Mohegan Sun announces positive financial results for quarter
Mohegan — Combining slight increases in revenue with continued cost-cutting, Mohegan Sun’s parent forged encouraging financial results for the three months that ended Dec. 31, the first quarter of the company’s 2015 fiscal year.
“It’s the first quarter we’ve had an increase in both gaming and nongaming revenues since 2012 and the best slot growth in Connecticut (Mohegan Sun) since the fourth quarter of fiscal 2007,” Mitchell Etess, the Mohegan Tribal Gaming Authority’s chief executive officer, said Thursday during a conference call with gaming analysts.
He cited the end of buyout payments to an early business partner and progress on a casino project in Washington state as additional signs that the authority’s fortunes are improving.
The authority reported that a leading indicator of performance — adjusted EBITDA, an acronym for net income before interest, income taxes, depreciation, amortization and other income and expenses — was up 32.2 percent over the first quarter of fiscal 2014. Only last month, the authority’s annual report for fiscal 2014, which ended Sept. 30, indicated its adjusted EBITDA fell 10.6 percent.
The authority also operates Mohegan Sun at Pocono Downs in Wilkes-Barre, Pa.
Other first-quarter results released Thursday showed the authority’s gaming revenues totaled $277.7 million, a 1.1 percent increase, while nongaming revenues were $63.2 million, up 0.4 percent. Gross slot revenue of $197.9 million was also up 0.4 percent.
Two weeks ago, Mohegan Sun reported that the amount of slots wagers it “won,” or kept, in December was 6.7 percent more than it won the same month the previous year. It was the Uncasville casino’s best year-over-year performance in three years.
Etess attributed the improved revenues to the falling gas and heating oil prices that have fattened casino-goers’ wallets. At the same time, he said, Mohegan Sun has continued to reduce its costs, offering 14 percent less free play in the quarter and cutting overall marketing expenses by $9 million.
Looking ahead, authority executives said they welcome the “post-relinquishment era,” which began following the authority’s payment this month to Trading Cove Associates, the Mohegan Tribe’s original partner in developing Mohegan Sun. Trading Cove agreed to relinquish its right to manage the casino in exchange for 5 percent of the casino’s gross revenues over a 15-year period.
Free of the payments, which amounted to about $50 million a year in recent years, the authority will be able to use the windfall to pay down long-term debt, said Mario Kontomerkos, the authority’s chief financial officer.
Prospects for the Washington state project brightened last month when a federal judge cleared the way for the U.S. Bureau of Indian Affairs to take land into trust for a casino project long planned by the Cowlitz Indian Tribe. In 2004, the authority agreed to partner on the development and management of the project.
Kontomerkos said the authority stands to be reimbursed for some $40 million it has invested in the project, and will derive development and management fees as well, providing income for a decade or more. The authority’s agreement calls for it to manage the casino for the first seven years of its existence.
Stories that may interest you
HP board rejects $33.5B offer from Xerox, citing concerns about debt and trajectory
Rod Cornish opens "1784", a restaurant whose fare is described as “cheeseburgers, grinders and fresh bread" and where no menu item tops $9.95.
Walmart has agreed to change its national policy for reassigning disabled workers to settle a lawsuit brought by the U.S. Equal Employment Opportunity Commission in Maine