Supplier News

US – Locals market continues to grow but Boyd misses estimates

By Phil - 4 August 2016

Having offloaded Borgata in Atlantic City to focus on the Las Vegas locals market, Boyd Gaming’s second quarter results dipped with revenues of $544.9m, compared to $559.9m in the year-ago quarter.

The total missed the consensus estimate of $558.66m but still came with some positives.

The Las Vegas locals market generated $154.9m, an increase of 1.2 per cent from last year marking the fifth straight quarter of revenue growth.

Downtown revenues also increased for the sixth consecutive quarter, with net revenues at $59.2m, an increase of 1.3 per cent from last year.

Having sold its share in Borgata, Boyd expects to complete the purchase of Aliante in September and the Cannery and Eastside Cannery towards the end of the year.

“Aliante is an asset without rival in the North Las Vegas market, strategically positioned to benefit from substantial future growth across the northern part of the Las Vegas Valley,” said Boyd President and CEO Keith Smith. “Together, Aliante and Cannery Casino will give us a strong foothold in North Las Vegas, one of the fastest-growing areas in the Las Vegas Valley. And we will have unique synergy opportunities at Eastside Cannery, given its close proximity to Sam’s Town. Our southern Nevada assets have delivered the strongest revenue growth in our Company over the last two years, and this acquisition will broaden our portfolio in this promising market. Today we are mainly focused on getting to the finish line on a couple of these transactions.

Mr. Smith added: “The second quarter of 2016 was a significant time for our Company, as we executed several transactions that will strengthen our financial foundation and position us for continued growth. With the acquisitions of Aliante and the Cannery properties, we will be expanding our presence in the high-growth Las Vegas locals market. And we unlocked the significant value in our Borgata joint venture, allowing us to further accelerate our deleveraging efforts.”

“In terms of our operational performance, results across our business segments were varied. In Las Vegas, strong performances in our Locals operations in April and June were tempered by a tough year-over-year comparison in May, while our Downtown Las Vegas operations continued to deliver a high level of performance. In the Midwest and South segment, our performance improved modestly from trends earlier in the year, while the Peninsula segment performed below our expectations, largely due to a weaker than expected gaming market in Kansas. We continue to make significant progress in the execution of our growth strategy, and are optimistic about the future.”