The Republic of Korea emerges as the top revenue generator in Mohegan's history as the results for the fourth quarter of 2023 were unveiled, affirming the anticipated profitability of the integrated resort in South Korea.
A press conference held by Mohegan management on December 14 provided comprehensive insights into the resort's operations and profit levels, allowing industry experts to pose questions and seek further clarification.
Mohegan disclosed its full-year real estate and digital revenue for fiscal 2023, revealing a remarkable increase of $81.7 million compared to the previous year. This surge marked the company's highest net income in its 27-year history and the second-highest adjusted EBITDA.
The press conference, led by four Mohegan executives, delved into the financial results of the quarter and opened the floor for a thorough exchange of questions and answers. During the session, the management underscored that the announced forecasts are preliminary and may not entirely capture the events of 2024.
In his opening address, Thane D. Hutchins Jr., a Mohegan board member and financier, discussed the recent launch of Mohegan Inspire, the company's new facility in South Korea, inaugurated on November 30, 2023. He also highlighted the ongoing expansion of the company's digital business, seen as a key driver supporting Mohegan's sustained growth.
Hutchins Jr. extended a warm welcome to Mohegan's new Vice President of Markets and Investor Relations, corporate financier Jeffrey Wells.
Mohegan's CEO, Ray Pinault, further underscored the financial strides made by Mohegan in 2023. The revenue surged by $81.7 million to reach $6.17 billion, while the adjusted EBITDA reached $399.9 million, marking the "second-highest in the company's history." Pinault's opening remarks highlighted successes in Connecticut and Canada, alongside the company's endeavors to secure a land-based casino license in New York.
Acknowledging the significant contributions of CFO Carol Anderson, who is set to depart in March 2024, Pinault expressed gratitude, stating, “Her leadership, dedication, knowledge, and attention to detail are second to none, and I personally will miss Carol on our team.” The search for an apt successor for Anderson is currently in progress.
Following the opening remarks, Pinault, Anderson, and Chief Operating Officer Jody Madigan provided a comprehensive update on fiscal 2023 results, paving the way for questions from industry experts. Mohegan Inspire's initiatives were frequently mentioned during the session. In response to a question from a Deutsche Bank representative, Pinault addressed the revenue outlook for Inspire Korea and the expectations for the property's profitability in 2024.
In a Q&A session, Madigan kicked off by discussing his attendance at the Inspire opening, expressing his delight, "I was absolutely thrilled with how everything went. Although South Korea does not yet have a gambling business, it offers hotel accommodations, food and drink services, and hosted two major events during the opening week: a banquet on opening night and the Melon Awards ceremony two days later." Madigan likened the 15,000-seat super show featuring 30 of the world's most popular musicians and singers to a Korean version of the Grammys.
Post the weekend, the site witnessed anticipated hotel occupancy and a significant number of visitors, along with elevated prices for food and drinks. Madigan remarked, "And we are not yet fully loaded. We're planning a few more gaming projects early in the first quarter, calendar first quarter of '24, and additional non-game projects to follow shortly thereafter, possibly in the second quarter of '24."
During the meeting, it was confirmed that Mohegan aims to secure a gaming license in South Korea in the 1st quarter of 2024.
“I believe we will be cash flow positive by the end of the year,” affirmed Chief Operating Officer Jody Madigan.
“We are more excited about this project than ever,” Madigan continued.
Responding to an intriguing question about South Korea considering the lifting of the ban on some forms of public casino promotion, Madigan stated, “We definitely have our finger on the pulse of everything related to domestic gambling in South Korea. Obviously, lifting the ban will be a game-changer for the company if we are ever allowed to promote gambling in Korea. Trust in the fact that we are doing everything we can to bring gaming to Korea at the scale it needs to be.”
Pinault echoed Madigan's sentiment about South Korea, noting that while the facility's design was based on the idea of being a "foreigners-only casino," he expressed confidence in its performance. He added, "But domestic gaming is something we will support if we can get approval from the government, which is already in the process of considering the issue.”
