Share
The Mohegan Tribal Gaming Authority reported Tuesday that the company had its highest annual revenue to date for its fiscal year 2024.
The last day of the year 2024 the company publish its fourth quarter and full fiscal year results, which ended on September 30, 2024. This past year marked its debut in a whole new jurisdiction, South Korea, but despite venturing into new waters and dealing with the uncertainties that come with such expansion, the company recorded record revenue.
Having achieved this feat, Raymond Pineault, Chief Executive Officer of Mohegan, recounted in a company press release how the company has grown since its inception.
It’s been 30 years since the Mohegan Tribe was granted federal recognition in 1994, and in that time, since we opened the Mohegan Sun here in Connecticut, we have transformed Mohegan from a regional, single casino into one of the premier global integrated omni-channel resort operators.
“This year marks the culmination of a number of important initiatives that enable us to build on these accomplishments and remain focused on executing our strategy.”
Mohegan’s diverse operations drive record-breaking revenue
At the moment, Mohegan’s operations are spread across several states in the US and North America, including
- Connecticut
- New Jersey
- Nevada
- Pennsylvania
- Ontario
- Niagara Falls
From all these regions, while adding in the South Korea market, Mohegan’s net revenue sprang to $1.9 billion for the full year, a 13% increase from the previous year – the highest it has ever been.
The fourth quarter was no exception, with net revenues coming in at $497.7 million, up 12% from the same quarter last year. So, what is driving this growth? The results show that it is Mohegan Digital and the newly launched Mohegan INSPIRE resort, which are both clearly striking a chord with customers.
Ari Glazer, Chief Financial officer of Mohegan Sun, addressed the revenue in the press release.
Net revenues of $497.7 million increased $53.4 million compared with the prior-year period, primarily due to continued growth in Mohegan Digital and revenue from Mohegan INSPIRE.
Mohegan’s Q4 profitability declines in some sections
Despite revenue growth, the picture is not entirely rosy for Mohegan. The company’s fourth-quarter income from operations took a hit, tumbling 30% to $33.5 million.
Management points to the costs associated with launching Mohegan Inspire as the main culprit behind this decline. And when you look at the bottom line, things get even bleaker – Mohegan posted a Q4 net loss of $63.3 million, a significant swing from the $18.9 million loss it reported last year.
On top of that, adjusted EBITDA also slipped 8% to $81.3 million. It is clear that the costs of launching Mohegan Inspire have put a dent in the company’s profitability, at least for now.
“Consolidated Adjusted EBITDA of $81.3 million decreased $6.8 million compared with the prior-year period, primarily due to operating costs related to the opening of Mohegan INSPIRE, low table hold at Mohegan INSPIRE, an $11.9 million non-cash adjustment to the value of a customer contract asset at Niagara Resorts, and a full quarter of ilani management fees earned in the prior-year period, partially offset by strong growth in our Digital operations,” Glazer added.
Launch costs weigh in on full-year income
As it pertains to Mohegan’s full fiscal year income from operations, there was a 36% nosedive to $169.1 million, while net income swung from a modest profit of $22.9 million in 2023 to a loss of $234.5 million.
Taking a further toll, adjusted EBITDA also slipped 13% to $349 million.
“Consolidated Adjusted EBITDA of $349.0 million decreased $50.9 million compared with the prior-year period,” Glazer noted.
The cause of this decline remains:
- The operating cost of Mohegan INSPIRE
- A non-cash adjustment of $11.9 million to the value of a customer contract asset at Niagara Resorts
- $12.1 million in non-controlling interest at Niagara Resorts
- The absence of a full year of ilani management fees, which were earned in the prior-year period
- Strong growth in Digital operations, which helped to partially offset these negative factors
Mohegan’s financial foundation is built on a complex mix of cash, credit, and commitments. As of the end of September 2024, the company’s cash reserves stood at $204.8 million, down slightly from the $217.3 million it had in the bank a year earlier.
However, that cash is not entirely available for use. Mohegan has also committed to some big-ticket projects, which are backed by letters of credit that reduce its borrowing power. When you factor those in, the company’s actual borrowing capacity under its credit facility and line of credit drops to $187.2 million. That is the amount of money Mohegan can tap into if it needs to.
Hence, Mohegan is attempting to refinance its debt, a complex maneuver that hinges on favorable market conditions.
