Century Casinos has released its financial results for Q3 2022, indicating a net operating revenue of $112.6 million, representing a 4% decrease compared to the same period in 2021. The company’s adjusted EBITDA also declined by 15% to $28.1 million, while earnings from operations were down 22% annually at $20 million. In a statement by Erwin Haitzmann and Peter Hoetzinger, co-chief executive officers of Century Casinos, they attributed the slight decline to the outstanding financial performance in 2021, driven by reduced COVID-19 restrictions in Missouri, and the impact of inflation.
Factors Affecting Performance:
Strong Performance in 2021: Century Casinos’ revenue for Q3 2021 was bolstered by record results, mainly attributed to the easing of COVID-19 restrictions in Missouri. This exceptional performance set a high bar for comparison in Q3 2022, contributing to the 4% YoY revenue decline.
Inflation Impact: The company also faced challenges due to the prevailing inflationary pressures during Q3 2022. Rising costs for goods and services likely impacted their profitability, contributing to the decrease in adjusted EBITDA.
Riverboat Operations in Caruthersville: Century Casinos experienced additional expenses related to the riverboat in Caruthersville. Low water levels in the Mississippi River may have affected operations and increased costs during this period.
Recent Acquisition:
On August 24, 2022, Century Casinos entered into a definitive agreement with Lakes Maryland Development, Golden Entertainment, and VICI Properties to acquire the operations of Rocky Gap Casino Resort. The acquisition, valued at approximately $56.1 million, represents a strategic move to expand their presence and potentially diversify revenue streams.
Earnings Analysis:
Net earnings attributable to shareholders saw a significant decline of 74% from the three months ended September 30, 2021, amounting to $2.9 million. This sharp decrease in net earnings can be partially attributed to the various factors mentioned above, impacting the company’s overall profitability.
Outlook:
While Century Casinos faced challenges during Q3 2022, the acquisition of Rocky Gap Casino Resort may provide opportunities for growth in the future. The company’s performance in the upcoming quarters will be crucial to determine its ability to overcome the current obstacles and capitalize on the potential benefits of the recent acquisition.
Century Casinos reported a 4% YoY decline in net operating revenue and a 15% decrease in adjusted EBITDA for Q3 2022. The company’s outstanding financial performance in 2021, driven by reduced COVID-19 restrictions in Missouri, set high benchmarks for comparison. Additionally, the impact of inflation and additional expenses related to the riverboat in Caruthersville affected their profitability. However, the recent acquisition of Rocky Gap Casino Resort offers promising opportunities for future growth. As the company navigates these challenges, investors and stakeholders will closely monitor its performance and strategic moves in the dynamic casino industry.