Century Casinos generated all time record revenues and all time record adjusted EBITDA in 2017 thanks to revenue increases in Canada, Poland and the US.
For the year, net operating revenue came at $154m, up 11 per cent over 2016. The Canadian operations increased revenues by 13 per cent and adjusted EBITDA by nine per cent in local currency. The company’s casinos in the US grew seven per cent on revenues and 11 per cent on adjusted EBITDA.
Poland’s revenues were up four for the year, and adjusted EBITDA was down significantly which has to do with the six year licensing cycle for Polish casinos.
Peter Hoetzinger, Co-Chief Executive Officer of Century Casinos, said: “2017 was a good year for Century Casinos. We generated record net operating revenue and Adjusted EBITDA. Our largest and most significant project to date, the Century Mile racetrack and casino development in Edmonton, Canada, is on budget and on track for an early 2019 opening. We are very pleased with these results, but we are even more pleased with the state, the shape and condition of our company which is a result of a very efficient team effort of the great people we have in our offices in Colorado Springs and Vienna and at casino property level. All of them are very talented and engaged, striving for continued improvement in everything we do. Ultimately that leads to better experiences to our guest, to better results and to increase value for our shareholders and other stakeholders such as our lenders and the communities we operate in.
For the fourth quarter, net operating revenue was $39.3m, up eight per cent over Q4 of 2016.
Mr. Hoetzinger added: “Canada remains our strongest segment generating 39 per cent of our consolidated revenue and two thirds of our consolidated adjusted EBITDA. Canada grew revenues by 26 per cent for the quarter; adjusted EBITDA was up 16 per cent. Looking at the Canadian results in more detail, our largest property the Century Casino & Hotel – Edmonton which offers 822 machines and 35 gaming tables showed flat revenues. EBITDA grew by 30 per cent, the EBITDA margin jump from 35 per cent to 39 per cent despite the minimum wage increase that took effect on October 1.”
Century’s casinos in Poland generated 39 per cent of the company’s total revenue and 13 per cent of its consolidated adjusted EBITDA.
“Between the summer of 2017 and the summer of 2018, we have a number of our casino licenses expire for which we have already or will reapply,” Mr. Mr. Hoetzinger explained. “During that process, we see lower revenues because some casinos will close until re-licensing and higher costs because we keep the leases for the casino provisions in place and also keep most of the staff on the payroll. Having said that, business volumes at the existing casinos are strong. The drop at the gaming tables was up three per cent and the slot machine revenue was up 15 per cent in the fourth quarter, quarter over the fourth quarter of 2016, but unusually low table hold it was 13.9 per cent this quarter versus a more normal 22 per cent last year.”
Century has so far spent approximately $7m on its Century Mile development, where it has been chosen by the Alberta Gaming and Liquor Commission to own, build and operate the horse racing and gaming entertainment facility in South Edmonton. The total budget is expected to come in at US$40m.
Mr. Hoetzinger said: “We plan to open all facilities of the project in the early 2019. It’ll be a multi-level building with a footprint of 48,000 square feet, initially accommodating 550 slot machines, restaurants, bars, daily and off-track betting parlor and the grandstand plus convenient parking for over 1,700 cars.”
In the UK, Century has bought a casino project in the city of Bath.
“We plan to open at the end of May just over two months from now and expect again an EBITDA return on our investment of at least 25 per cent once the property has fully ramped up,” Mr. Hoetzinger said. “We will invest about $7m for the design and fit out of the 15,000 square feet casino space which will accommodate 18 gaming tables as well as around 60 gaming machine and live gaming terminals.”