Century Casinos posted record net operating revenue of $161.2m (£131.1m/€150.6m) in Q3, but this was not enough to stop the operator slipping to a net loss following a number of acquisitions.
Revenue was 43.2% higher year-on-year in Q3 and surpassed the previous record set in Q2. Century Casinos says this was driven by its acquisitions of Nugget Casino Resort and Rocky Gap Casino.
However, while revenue continues an upward curve, costs associated with the acquisitions more than offset this rise. Ultimately this led to Century reporting a net loss for Q3.
Reflecting on the quarter, co-chief executives Erwin Haitzmann and Peter Hoetzinger were seemingly untroubled by this loss. They put the loss down to one-time expenses, saying costs will soon return to more consistent levels in Q4.
“With our acquisitions of the Nugget Casino Resort and Rocky Gap Casino, we achieved record high net operating revenue and adjusted EBITDA,” Haitzmann and Hoetzinger said
“One-time expenses related to the Rocky Gap acquisition and Canada sale leaseback transaction negatively impacted our earnings from operations and net loss for the quarter. Looking ahead we anticipate revenue and operating expense trends to remain consistent with what we have seen the last several quarters.”
US growth clear to see for Century in Q3
Taking a closer look at the Q3 figures, the acquisitions impact is easy to see within the US business. US revenue was 65.4% higher at $116.9m on the back of the new casino additions.
Elsewhere, Canada revenue climbed 4.3% to $20.9m and Poland revenue was also higher by 7.7% at $23.4m.
However, with the acquisitions came an increase in costs, with operating expenses rising by 56.7% to $146.7m.
Century also noted $31.0m in non-operating expenses. This resulted in a pre-tax loss of $16.5m, compared to a $5.1m profit in Q3 last year.
Century received $3.1m in tax benefits but discounted $709,000 in earnings from its non-controlling assets. As such, Q3 net loss reached $14.2m, in contrast to last year’s $2.9m profit.
However, adjusted EBITDA was 18.5% higher at $33.3m.
Year-to-date revenue exceeds $400m
As to how Q3 impacted Century’s year-to-date performance, revenue was 24.4% higher at $406.5m. This, however, was accompanied by a 29.4% increase in operating expenses to $356.1m.
Century took $1.1m in earnings from equity investment but also reported $62.9m in non-operating costs. This resulted in a pre-tax loss of $11.4m, whereas last year it reported an $8.6m profit.
The operator received $1.3m in tax benefit but took off $7.3m worth of earnings from non-controlling interests. As such, it ended the period with a net loss of $17.4m, in contrast to last year’s $12.0m profit.
There was some good news on the earnings front, however, as adjusted EBITDA increased 8.6% to $88.7m.
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