Caesars Entertainment Corp’s portfolio of US properties showed positive momentum in the three months to 30 June 2019, with net revenues rising 4.9% to US$2.22 billion and Adjusted EBITDAR by 1.3% to US$631 million as the company prepares for its US$17.3 billion merger with Eldorado Resorts.
It wasn’t all good news for Caesars – a significant change in the fair value of the derivative liability related to convertible senior notes maturing in 2024 resulted in the company slipping from an income of US$29 million 12 months ago to a net loss attributable to its owners of US$315 million through the latest three-month period.
But at property level Caesars’ two key segments – Las Vegas and Other US – both performed strongly with growth across the board. The July 2018 acquisition of Centaur Holdings added another US$82 million to Caesars’ “Other US” revenues, pushing the segment’s total for the period to US$1.06 billion, an increase of 8.4%.
In Las Vegas net revenues grew 1.0% to US$1 billion while “All Other”, which comprises managed, international and other properties, grew 7.6% to US$156 million.
Caesars said that Las Vegas net revenues increased by US $10 million due to higher hotel and food and beverage revenues, partially offset by unfavorable hold at Caesars Palace and weak table game volumes, excluding baccarat.
Its Las Vegas hotels were boosted by a 6.3% increase in hotel cash revenue, with average daily revenue up 2.2% thanks to occupancy of 97.5%, up from 93.9% in 2018.
Group-wide casino revenues were up 6.0% for the quarter to US$1.13 billion and 8.0% for 1H to US$2.21 billion.
“Caesars delivered solid financial results in the second quarter driven by the contribution from Centaur and strength from our Las Vegas hotel and food and beverage businesses,” said Caesars CEO Tony Rodio.
“Our Las Vegas performance was the result of strong group and leisure demand, which produced an all-time quarterly record for hotel cash revenue and occupancy for the second consecutive quarter. These results were partially offset by competitive pressures in Atlantic City and other parts of our regional portfolio as well as unfavorable hold predominately at Caesars Palace.
“As we work toward successful completion of the proposed merger with Eldorado Resorts, the management team and I remain focused on improving the company’s operations and financial profile through incremental revenue opportunities and operating efficiencies. I’m confident that the proposed transaction will create an industry leading platform poised to succeed in our dynamic industry.”