Operator News
US – Losses widen at Caesars
By Phil - 17 March 2014
Losses at Caesars Entertainment tripled in the fourth quarter, as the largest owner of US casinos reported declines in casino revenue of $75.3m, or 5.1 per cent, compared with the prior year quarter.
Net revenues increased 3.2 per cent compared with the prior year quarter, primarily due to the combination of increases in revenues of Caesars Interactive Entertainment but casino revenues declined due to the continued impact of increased regional competition and continued softness in the domestic gaming market in certain US regional markets outside of Nevada as well as the reduction of revenues resulting from the partial sale of our Conrad Punta del Este casino in Uruguay in the second quarter 2013.
Gary Loveman, Chairman, Chief Executive Officer and President of Caesars, said: “During 2013 we invested significantly in our properties and executed a number of initiatives to enhance the company’s capital structure and better position the company for sustainable growth. The recently announced asset sale to Caesars Growth Partners further supports these objectives by increasing liquidity at our CEOC subsidiary and facilitating new investment in some of the assets.
“While the operating environment remained challenging in the fourth quarter, we are encouraged by volume and visitation trends in our core market of Las Vegas,” Mr. Loveman continued. “We are excited about our prospects here fuelled by organic growth and continued
investments in hospitality assets, most notably the LINQ and the High Roller. Looking ahead, our efforts to improve the company’s capital structure remain a key priority as we build on our recent actions and leverage our operating and financial toolbox to create value. The asset sale is an important step in our ongoing efforts to improve the health of the CEOC subsidiary. The process to address CEOC’s condition is well underway, but will take quite some time to achieve. I am proud of the milestones we have reached to date and look forward to making much more progress.”
Gaming volumes for table games were up, driven by strong results in the Las Vegas region. Slot volumes were slightly down, driven by regional weakness consistent with slot trends over the recent past.
Casino revenues declined in large part due to the continued weakness seen in Atlantic City resulting from increased regional competition. Slot volumes were down in virtually all domestic markets, while table volumes were relatively strong, primarily driven by baccarat in Las Vegas. Casino revenues were also negatively affected by increased variable marketing programs, notably in the fourth quarter. On a consolidated basis, we experienced unfavourable hold in 2013 compared with 2012.
Net revenues in the fourth quarter 2013 were relatively unchanged compared with the prior year quarter during which Hurricane Sandy closed our properties for five days in Atlantic City and two days in Philadelphia, significantly reducing revenues in the 2012 quarter. Additionally, the Atlantic Coast properties continue to be negatively affected by the competitive environment in the region, which has caused a decline in visitation to its properties. Casino revenues declined $10.8m, or 3.7 per cent, in 2013, compared with the prior year quarter, offset by increases in food and beverage and rooms revenues.
