MGM Mirage, the US casino giant, has announced that it will delay two projects after seeing its third quarter profits fall 67 per cent.
The credit crunch has hit Las Vegas gambling business hard, and the company – which is owned by Tracinda Corp and operates Vegas resorts such as the Bellagio and Circus Circus – has seen revenue drop 6 per cent to US$1.8bn (£1.1bn)
MGM Mirage's net income for the period ended 30 September dropped to US$61.3m (£38.5m), or 22 cents per share, compared with US$183m (£115.6m), or 62 cents per share, for the same period last year.
Shares, which were more than US$95 (£59.77) last year, rose 24 per cent on Wednesday to US$12.80 (£8.05).
Terry Lanni, chair and CEO of MGM Mirage, said in the announcement: “Our performance was impacted by the global economic environment, a trend that is not unique to our industry, but we continue to generate strong cash flows.”
The company has postponed work in its MGM Grand Atlantic City project, as well as a joint venture with Kerzner International and Istithmar on the Las Vegas Strip.
“We continue to believe that Atlantic City represents and important market for further development,” said Lammi. “We intend to resume development at such time as economic conditions and capital markets are sufficiently improved to enable us to go forward.
“Likewise, with respect to our joint venture with Kerzner International and Istithmar, we have agreed that we should defer additional design and preconstruction activities and have amended our joint venture agreement accordingly.”
