US – Boyd sees slight increase across the boardBy Phil - 1 May 2015
Boyd Gaming reported first-quarter 2015 net revenues of US$550.6m, an increase of 1.8 per cent compared to pro forma net revenues of $541.1m for the same quarter in 2014 with Downtown Las Vegas, Midwest and South and Borgata all showing increases.
In DownTown Las Vegas the improvement was due to more Hawaiian customers due to the company’s Hawaiian charter service.
Effective September 30, 2014, the company deconsolidated Borgata and is accounting for its 50 per cent investment in Borgata by applying the equity method for periods subsequent to that date. The prior-year pro forma amounts reflect the results for Borgata on a comparable equity method basis.
Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: “In the first quarter, we delivered broad-based EBITDA growth and margin improvement, driven by higher revenues and more efficient operations. We continued to make progress enhancing non-gaming amenities across our portfolio, allowing us to further capitalize on growing customer demand in this area. We also continued to use free cash flow to further reduce debt during the quarter. The execution of our company’s strategic plan is clearly improving our growth and profit potential, and increasing long-term shareholder value.”
Borgata reported first quarter 2015 net revenues of $182.6m, an increase of 9.2 per cent from $167.3m in revenues reported in the year-ago period. Adjusted EBITDA at Borgata was $37.8m, nearly doubling from $20.5m in the year-ago period.
Due to its deconsolidation, the company now applies the equity method of accounting to its investment in Borgata. The Company’s share of Borgata’s Adjusted EBITDA was $18.9 million for the first quarter of 2015 as compared to pro forma Adjusted EBITDA of$10.2m for the prior-year period.
Borgata generated a 7.4 per cent increase in gaming revenue during the quarter, with growth in both slot and table game win. Additionally, Borgata’s online operations generated a profit for the third consecutive quarter, generating $1.1m in EBITDA during the first quarter of 2015, compared to a loss of $3.2 million in the year-ago quarter.
In the Las Vegas Locals segment, first-quarter 2015 net revenues were $150.3m, compared to $151.4m in the year-ago period. Declines in revenue and EBITDA were the result of significant business disruption caused by an extensive roadway project adjacent to the Suncoast, as well as lower sports book hold related to the Super Bowl. These items were partially offset by growth in non-gaming revenues, which increased for the seventh consecutive quarter.
In the Downtown Las Vegas segment, net revenues were $56.6m in the first quarter of 2015, up 1.6 per cent from $55.7m in the year-ago period. Results reflect increased gaming revenues from Hawaiian customers, continued growth in pedestrian traffic in downtown Las Vegas, and lower fuel costs at the company’s Hawaiian charter service.
In the Midwest and South segment, net revenues were $217.8m, an increase of 2.9 per cent from $211.6m in the first quarter of 2014.
The Peninsula segment reported net revenues of $125.9m, up three per centfrom $122.3 million in the first quarter of 2014. Adjusted EBITDA grew 3.6 per cent to $46.4m, compared to $44.8min the year-ago period.
Positive results were driven by broad-based revenue growth and improved operating margins. Ten of the 12 properties in the segments generated revenue and EBITDA growth in the quarter, led by particularly strong performances at Kansas Star, IP, Blue Chip and Treasure Chest. Delta Downs achieved EBITDA levels similar to last year’s record performance due to strong visitation from its core customers, despite the introduction of significant new capacity in the market.
Mr. Smith added: “The Southern Nevada economy is strengthening, the local population is growing, more people have jobs, visitation is rising and consumers are spending more. This is translating into continued growth throughout our locals business, especially in our nongaming areas. I think there are some positive signs out there across the board. As we look to the future, it is clear to us that our customer base is changing, we’re seeing a younger demographic of customers who are looking for high-quality and engaging amenities. At the same time, our existing customers have shifted more of their spending away from the casino floor.”