Caesars Posts Its Results for the First Half of 2019
Caesars Entertainment has published its results for the first half of this year, revealing a rise in net revenue, but also a net loss.
The casino giant recorded a revenue of $4.34 billion during the first six months of 2019, which is an increase of 6.1% when compared to the corresponding period of last year.
Casino Operations Leading the Way
The latest figures clearly show hat casino operations are still the biggest source of income for the Las Vegas-headquartered company in the first half of the year. Casino revenue also recorded a rise, going up from $2.04 billion in the first six months of 2018 to $2.21 billion, with the firm’s operations in Las Vegas cited as the main driving force behind this growth.
In addition to casino, Caesars generated more revenue in other areas of its business as well, with food and beverage revenue improving by 4% to $805 million, and rooms revenue by 5% to $793 million.
Caesars also reported a rise in operating expenses during this period, which amounted to a total of $3.83 billion. Direct casino costs surged by 10.6% to $1.25 billion, with all other expenses reaching $927 million.
Although there was a 10.95% drop in depreciation and amortization costs during the first half of 2019, the company did note an extra charge of $50 million related to the impairment of intangible assets.
Solid Results, Says CEO
Income from operations recorded a 25% rise to $509 million, but higher loses in some areas of the company’s business resulted in an increase of net loss, which skyrocketed from $5 million in the same period of 2018 to $532 million. Loss before taxes also made a significant increase, jumping from $28 to $622 million.
Revenue increased by 4.9% to $2.22 billion. Net income in Las Vegas also improved by 12.2% to $184 million, while Caesars’ other operations in the U.S. bounced back to reach an income of $16 million. However, due to a rise in a net loss in its other operations, Caesars’ total net loss for the second quarter reached $315 million.
Commenting on the latest results, Tony Rodio, Chief Executive officer at Caesars said the company had delivered solid financial results in the second quarter driven by the contribution from Centaur and strength from its Las Vegas hotel and food and beverage businesses. He pointed out their Las Vegas performance had been the result of strong group and leisure demand, which had produced an all-time quarterly record for hotel cash revenue and occupancy for the second consecutive quarter.
Rodio further said these results had been partially offset by competitive pressures in Atlantic City and other parts of their regional portfolio, as well as unfavourable hold predominately at Caesars Palace.
Last month, Caesars Entertainment Corporation announced the company would merge with Eldorado Resorts, in a move that should create a new gambling giant in the U.S. market. The entire deal is worth around $17.3 billion, and under its provisions, Eldorado Resorts purchased all of the outstanding shares in Caesars for the price of $12.75 per share.
Rodio added he was confident the proposed transaction would create an industry-leading platform, ready to succeed in the dynamic gambling industry.