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US – Cosmopolitan continues turnaround with second quarter of profit

By - 17 November 2015

The Cosmopolitan of Las Vegas has reported a second consecutive quarter of profit, turning around a loss from a year ago.

Now owned by Nevada Property 1 LLC a subsidiary of New York-based Blackstone Group, who bought the property for $1.73bn, The Cosmopolitan generated revenues of $4.7m, for its third quarter ending September 30, reversing a net loss of $15.3m for the same period last year.

Casino revenue increased $300,000 to $55.8m with revenue streams for entertainment, restaurants and hotel all reporting single digit revenue decline.

Revenue from table games fell 8.7 per cent, but slot machines drove the improved results with revenue increasing 21.9 per cent.

The Cosmopolitan said it would focus on ‘supplementing the level of table games’ played by domestic and international guests, as well as boosting the volume of slot play even more.

Hotel revenue in the third quarter was $76.6m, falling 4.6 per cent from $80.3m for the period in 2014, due to a drop in room occupancy.

Food and beverage revenue came in at $78.2m, declining by 6.3 per cent from about $83.5m in 2014. The Cosmopolitan highlighted a $2.4m drop in revenue from its Marquee nightclub due to increased competition.

“We may continue to experience a decline in food and beverage revenue in future periods as competition increases and we evaluate the mix of restaurants at our Property,” the Cosmopolitan said in its filing.
Revenue from entertainment, retail and other sources, meanwhile, fell from $12.2 m to $8.2m marking a 32.9 per cent decline due to less entertainment events taking place this year.

In a SEC filing the property provided details about the fallout of a fire at one of the Cosmopolitan’s pools this summer, which forced it to write off $300,000 of damaged property and equipment.

The Cosmopolitan also filed an insurance claim which provided a $2.9m advance for the value of what was destroyed in the fire.

“Additional proceeds from our insurance companies may be received in subsequent periods as we continue finalizing the submission of our claim,” the filing said. “We may incur additional costs that may not be reimbursed by our insurance companies.”

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