Mohegan Gaming & Entertainment has released its financial outcomes for the fourth quarter and fiscal year ending September 30, 2024, highlighting strong revenue growth while grappling with substantial liquidity and debt challenges. The company has achieved record-breaking net revenues but also faces critical hurdles tied to its South Korean project and upcoming debt maturities.
The company reported $497.7 million in net revenues for the fourth quarter, marking a 12% increase from the prior year, driven by growth in Mohegan Digital and the recently launched Mohegan INSPIRE resort. Consolidated annual revenues reached a record $1.89 billion, up 13% from fiscal year 2023. However, adjusted EBITDA for the fiscal year decreased by $50.9 million to $349 million, primarily due to higher operating costs associated with Mohegan INSPIRE and adjustments related to asset valuations at Niagara Resorts.
Domestic operations saw notable improvement, with fourth-quarter revenues rising by $36.2 million to $327.1 million, fueled by robust non-gaming activities such as entertainment and food services. Similarly, Mohegan Digital’s annual revenues surged by $60.1 million, reflecting continued expansion in its Connecticut operations.
Challenges with International Ventures
Despite these successes, Mohegan’s international operations present significant challenges. The Mohegan INSPIRE integrated resort in South Korea generated $62.2 million in fourth-quarter revenues but is yet to achieve profitability nine months after its December 2023 opening. Additionally, the Korean Term Loan of $275 million, associated with this project, has entered default status due to unmet financial covenant requirements. Inside Asian Gaming pointed out that Mohegan also faces a looming $704 million credit facility maturity in November 2025, raising concerns about its capacity to meet these obligations without refinancing.
The company’s Annual Report underscores the potential risks if lenders exercise rights over pledged collateral, including MGE Korea Limited’s stake in Mohegan INSPIRE. CEO Raymond Pineault remarked on the company’s strategic focus, emphasizing the need for refinancing and liquidity solutions to navigate these obstacles.
Broader Financial Concerns
Mohegan’s broader financial landscape reveals mixed results. Corporate operations recorded a $13.2 million loss in adjusted EBITDA for the quarter, reflecting increased labor costs and losses on fair value adjustments tied to its Korean ventures. Net income for the company’s domestic operations rose to $66.7 million in the fourth quarter, driven by enhanced gaming and non-gaming revenues, but these gains were offset by international losses totaling $48.1 million for the same period.
Looking ahead, Mohegan’s management has laid out plans to refinance its senior secured credit facility and other liabilities. However, the success of these efforts remains uncertain and hinges on favorable market conditions.
Mohegan’s 2024 financial results reflect a company balancing historic revenue achievements with pressing financial risks. While domestic and digital growth underscore its operational strength, the challenges tied to its international ventures and debt obligations present considerable uncertainties. Stakeholders will closely monitor Mohegan’s efforts to secure refinancing and maintain liquidity in the coming months.
