Caesars Entertainment begins long road back to financial profitability
Worldwide casino resort operator Caesars Entertainment Operating Co has revealed that its net losses for Q2 2017 have narrowed to $1.4bn from its previous year-on-year high of $2bn, as the company continues to rebound from its chapter 11 bankruptcy.
In its latest filing with on NASDAQ, the company revealed that net revenues had increased by 1% year-on-year to $1 billion, mainly due to higher volumes across properties, strong hotel performance in Las Vegas and incremental revenues from operational initiatives.
Caesars Entertainment Operating Company Adjusted EBITDA remained largely flat year-over-year at $289 million.
In a statement released with the results, Mark Frissora, President and Chief Executive Officer said: “In the second quarter, stronger gaming fundamentals across most of our properties were offset by expected unfavourable year-over-year hold, primarily in baccarat, and the impact of more hotel rooms off the market for renovation.”
“Despite these second-quarter headwinds, we have seen improved performance in the third quarter and believe we are on track to surpass our initially disclosed 2017 full-year EBITDAR projections by at least $40 million before the anticipated deconsolidation of Horseshoe Baltimore. We currently expect to complete the restructuring of CEOC and the merger of Caesars Entertainment and Caesars Acquisition in the first week of October, which will allow us increased flexibility to prudently invest in growth.”
The company confirmed that its revenue dipped partly as a result of Las Vegas hotel rooms being unavailable due to casino renovation projects. A reported 1,132 rooms are currently being renovated at Caesars Palace, 950 at Harrah’s and 410 rooms at the Harrah’s Laughlin. An additional project that includes the renovation of 1,270 rooms at the Flamingo and 2,068 rooms at Bally’s has had to be pushed back to 2018.
Reports confirm that renovation work will be completed on 6,000 hotel rooms at the company’s six casino properties by the end of 2017. Despite the high number of rooms currently being renovated the company reported that its year-on-year, continuing occupancy improved 1.4%, and lodging revenues increased 1.3%.
The company is still emerging from a long running $18bn bankruptcy saga which looked to be at an end earlier this year when a US court granted it permission to shed $10bn of toxic debts and separate its US based property assets from its gaming operations.
However, the company’s restructuring plan still requires approval from regulators in Louisiana and Missouri, with Nevada’s Gaming Control Board scheduled to conduct a review of the plan over the next few weeks.
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