Pinnacle Entertainment, the US operator that has just been bought by Penn National, has reported a record year with its best ever revenue and EBIDTA.
Net revenues for the year increased by $183m or 7.7 per cent year over year to a record $2.6bn. Net revenues included a $281.9m contribution from The Meadows versus $83.9m in the prior year. The records came despite net revenues decreasing in the last quarter by $16.6m or 2.6 per cent year over year to $620.8m.
Anthony Sanfilippo, Chairman and Chief Executive Officer of Pinnacle Entertainment, said: “2017 was another terrific year for Pinnacle Entertainment’s shareholders. We are very proud of the dedicated effort and work of the team members across our portfolio of businesses and at our Las Vegas Service Center, which is the driving force behind the positive financial outcomes we have been able to achieve. In 2017, we produced record net revenues and Consolidated Adjusted EBITDAR, which are the results of the many operational excellence initiatives we have implemented over the past two years along with the returns on the focused and prudent capital investments made across our portfolio of businesses. We have also strived to make continuous progress on our balance sheet, while also returning capital to our shareholders. In 2017, we repaid $131.2 million of debt and repurchased $22.3 million of Pinnacle shares at an average price of $19.51.
“Our strong 2017 financial results were driven by balanced regional same-store Adjusted EBITDAR growth and margin expansion, as well as the first full year of contributions from The Meadows. Overall, we achieved net revenue growth of 7.7% to a record $2.6 billion and Consolidated Adjusted EBITDAR growth of 7.2% to a record $701.9 million. Underlying these results is Consolidated Adjusted EBITDAR growth of 1.4 per cent and Consolidated Adjusted EBITDAR margin expansion of 60 basis points in our same-store portfolio of businesses.
“Our 2017 financial results were led by exceptional performances from our River City, L’Auberge Baton Rouge, L’Auberge Lake Charles, and Ameristar Black Hawk businesses throughout the year. In the South segment, L’Auberge Lake Charles, the perennial thoroughbred of our portfolio, grew Adjusted EBITDAR 2.6 per cent and expanded margins 170 basis points despite the severe hurricane headwinds the property faced in the third quarter of the year due to flooding in Houston and Southeast Texas. L’Auberge Baton Rouge grew net revenues five per cent and Adjusted EBITDAR 9.8 per cent, profitably expanding Adjusted EBITDAR margins by 130 basis points in 2017. River City, in our Midwest segment, expanded Adjusted EBITDAR margins by 140 basis points through profitable net revenue and Adjusted EBITDAR growth of 1.4 per cent and 5.7 per cent, respectively. Rounding out the segments, Ameristar Black Hawk in the West produced a superb year with net revenue growth of 3.6 per cent, Adjusted EBITDAR growth of 5.1 per cent, and Adjusted EBITDAR margin expansion of 60 basis points. Ameristar Black Hawk continues to benefit from our multi-year effort to reposition it as the premier gaming entertainment destination resort in the broader Denver market.
“Our focus in 2018 remains on operations and our initiatives to drive profitable revenue streams and expense efficiency. We continue to pursue prudent capital investments to maintain the high quality businesses in our portfolio and expand the amenities we provide our guests. At Ameristar East Chicago, we have an approximately $20m capital initiative underway to construct a new land-based high limit casino space and renovate the existing casino floors of the property. The renovation of the existing casino floors, which we expect will be completed this summer, will improve the overall quality of the gaming entertainment experience at Ameristar East Chicago, while allowing us to optimise its capacity, layout and game mix.
“We will make every effort to maximize the financial performance of our gaming entertainment businesses and to repay debt on our balance sheet, with the goal of having our Company on its best financial footing at the time of the closing of the transaction with Penn National. We will also work closely with the Penn National team to obtain the necessary regulatory approvals and to plan a smooth transition and seamless integration of these two great companies upon the closing of the transaction,” concluded Mr. Sanfilippo.