Casino giant MGM Mirage takes a massive hit on profits
Wednesday 18th March 2009
World-renowned casino operator MGM Mirage has reported a loss of $1.15 billion for the fourth quarter of 2008 after being forced to write down earlier acquisitions to the tune of $1.18 billion which it acquired back in 2005. The company also reported a significant fall in revenues from $1.93 billion for the corresponding period in 2007 down to $1.6 billion for the final quarter of 2008. So what next for the casino giant?
Even though MGM Mirage shares were down slightly after the figures there was a sense of relief with the news that the company managed to repay $300 million to its lenders in exchange for a brief period of respite until 15 May. As more and more casino groups struggle to repay their debts the news of the debt repayment by MGM Mirage was well received by analysts although the company is by no means out of the woods as yet.
At this moment in time it is unclear as to when the casino market will recover in the U.S. and worldwide, with many analysts expecting a very difficult two years for the sector. While companies such as MGM Mirage have substantial debts they appear to be better placed than some of their smaller counterparts who are struggling with cash flow and feeling severe pressure from their bankers.
World-renowned casino operator MGM Mirage has reported a loss of $1.15 billion for the fourth quarter of 2008 after being forced to write down earlier acquisitions to the tune of $1.18 billion which it acquired back in 2005. The company also reported a significant fall in revenues from $1.93 billion for the corresponding period in 2007 down to $1.6 billion for the final quarter of 2008. So what next for the casino giant?