|The world’s second largest gaming company, MGM Mirage Incorporated, has announced that profits for the first quarter of the year fell by 30 percent due, in part, to the struggling American economy.|
The Las Vegas-based company reported that earnings dropped to $118.3 million compared with $168.2 million for the same period last year.
'This quarter was challenging and it was clearly impacted by the economy,' said Terrence Lanni, Chief Executive Officer for MGM.
'Our job is to manage within the context to maximise profitability in what will surely be a challenging year.'
Revenues also slipped to $1.88 billion from $1.93 billion for the same period in 2007 with Lanni stating that MGM planned to increase revenues through marketing along with attempting to manage costs better. The company made more than 400 mid-level corporate employees and property managers redundant last month but said that there are no plans for further cuts unless the economy worsens further.
MGM owns several resorts including the Bellagio, Mirage and Mandalay Bay on the Las Vegas Strip and opened a new joint venture in the Chinese gambling enclave of Macao, the MGM Grand Macao, in December.
A fire in January at its Monte Carlo casino that slightly injured 17 people also hurt profits. The resort did not reopen until mid-February and its profits were down $20 million to $14 million with MGM reporting that one in five rooms and suites remain out of service.
Lanni said that the company's resorts are still attracting wealthy customers and generating revenues despite the weak economy but reported that the volume taken from table games fell four percent for the quarter alongside a one percent decrease on slot machine returns. In addition, room revenues diminished by six percent with average room rates down two percent at the company's Las Vegas resorts.