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US – Caesars sets new records in quarterly EBIDTA as Las Vegas occupancy improves

By - 5 August 2021

With a ‘dramatic improvement’ in Las Vegas, Caesars Entertainment saw its revenue boom by more than $700m to $2.5bn in its second quarter, a setting new records in quarterly adjusted EBITDA along the way.

Net income came in at $71m compared to a net loss of $100m for the comparable prior-year period with the company posting ‘all-time records in quarterly Adjusted EBITDA and Adjusted EBITDA margin.’

Tom Reeg, Chief Executive Officer of Caesars Entertainment, said: “Our second quarter operating results improved significantly versus the first quarter of 2021 driven by continued strength in our regional markets and a dramatic improvement in results in our Las Vegas segment. With the William Hill acquisition now closed, we have officially rebranded our sports betting operations to Caesars and we launched our new comprehensive marketing campaign on August 2, 2021.”

Anthony Carano, President and Chief Operating Officer, said: “Total occupancy for Q1 was 89 per cent, with weekend occupancy 99 per cent and mid-week occupancy 85 per cent. We delivered these outstanding Las Vegas segment results despite operating with capacity and social distancing restrictions for the first 2-plus months of the quarter. In addition, we had minimal group business and weak table hold in the quarter.

“We remain encouraged by booking trends for the second half of ’21 and into 2022,” he added. “We’re expecting groups to start returning to Vegas with each month getting better as we progress throughout the second half of the year. Group and convention revenues on the books for the second half of ’21 versus ’19 are currently pacing up approximately 18 per cent. Caesars Forum continues to exceed the original underwriting expectations with over 176 events booked currently representing 1.7m room nights and $657m of revenues for all future periods. 76 per cent of this business is brand new to Caesars.”

After combining the results from the operations of Caesars Entertainment with William Hill US prior to the acquisition and the results of our properties classified as discontinued operations but were not divested at the end of the period, which we refer to as a same-store basis for the period, Caesars Entertainment, Inc. reported same-store net revenues of $2.6bn and adjusted EBITDA of $1bn.

With the sports betting rebrand to Caesars Digital now formalised, the company’s 2021 calendar year capex has increased from $500m to $550m, which includes approximately $100m for Caesars Digital and an acceleration of spend in New Orleans.

Mr. Reeg said: “You should expect digital to be a material EBITDA loser starting this quarter as we’re launching a new brand with a nationwide advertising campaign in addition to everything you do, in social. So you’re talking about TV, both national and local, and some expensive markets with $1bn plus of spend to run through that EBITDA line over the next two and a half years or so.”

In its Regional segment, same-store revenues were $1.5bn and same-store adjusted EBITDA was $621m. For Caesars Digital, the sports betting and online gaming segment, same-store net revenues were $117m and same-store adjusted EBITDA was $2m.

In terms of redevelopment works the company is confident that its revamped property in Lake Charles will reopen next year.

Mr. Carano said: “Construction is well underway on our new land-based facility in Lake Charles. This significantly upgraded property should be completed and ready for business in the second half of ’22. In New Orleans, construction work has started on our new hotel tower and property upgrades. In Las Vegas, the remodelling of the entrance to Caesars Palace has begun, and we look forward to a dramatically improved arrival experience later in the year. In Indiana, we are well underway with our casino expansion at Indiana Grand, which should be finished by January of 2022.”

As of June 30, 2021, Caesars had $14.7bnin aggregate principal amount of debt outstanding. Total cash and cash equivalents were $1.1 billion, excluding restricted cash of $622m.

“We anticipate that our balance sheet will be further enhanced through improved operating trends and expected asset sale proceeds. We paid down $325m of debt during the quarter and remain committed to further debt reduction,” said Bret Yunker, Chief Financial Officer.

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