Mohegan Sun Profits Plummet
UNCASVILLE, Conn. (AP) _ The parent company of the Mohegan Sun casinos in Connecticut and Pennsylvania reported a two-thirds plunge in fourth-quarter profit Wednesday, citing a loss on debt exchange and higher expenses for its unsuccessful attempt to win voter approval for a proposed Massachusetts casino.
Net income for the three months ended that Sept. 30 was $4.9 million, down from $14.8 million in the fourth quarter of 2012, said the Mohegan Tribal Gaming Authority, which has its own fiscal year that ends Sept. 30.
Revenue of $345.3 million was down 2 percent from the same period last year.
Chief Executive Officer Mitchell Grossinger Etess said recent debt refinancing is “extremely significant” and will strengthen the tribal authority’s balance sheet and improve cash flow. The authority, which runs the Mohegan Sun casinos in Uncasville, Conn., and Wilkes-Barre, Pa., expects to save $16 million in interest costs.
The tribal authority announced last month it’s refinancing $715 million in debt, allowing it to stretch out the due date of debt for five years.
At its Pocono Downs site in Pennsylvania, the tribal authority reported lower slot revenue, which it said reflects the continued sluggish economy, higher local property taxes and construction disruptions associated with its hotel and convention center expansion.
The Mohegan tribe debuted a 238-room hotel and 20,000-square-foot convention center at the Pocono Downs casino complex last week.
But table game revenue was higher and cost saving initiatives that began in March 2013 are reducing operating costs and expenses.
On a conference call with investor analysts, Etess said he sees a “resilience in table games” that he said may be due to the strong stock market that boosts consumer confidence and younger players who have adapted to the low-growth economy.
Voters in Palmer, Mass., narrowly rejected a yearslong effort by the Mohegan Sun on Nov. 5 to seek a state license to operate a resort casino. A recount is set for Nov. 26.
Etess said the Mohegan Tribal Gaming Authority is looking to establish a presence in New York following voter approval two weeks ago for a plan to let seven Las Vegas-style casinos to be built around the state.
“It created opportunities for us,” he said.
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