Century Casinos said COVID restrictions in Canada, where proof of vaccination was required to enter casinos and casino alcohol sales were halted at 11 p.m., slowed patron traffic and hurt fourth-quarter results. The company’s earnings fell from a year earlier and missed Wall Street forecasts, although revenue rose and beat them.
The Colorado Springs, Colorado-based company, which in January said it would buy the operations and half the real estate of Sparks, Nevada’s Nugget hotel-casino from Marnell Properties, raised estimated costs for a pair of Missouri casino projects and warned that a lawsuit would delay one of them.
The company’s shares sank 9% in regular trading.
In a Tuesday statement, Century Casinos, which owns nine hotel-casinos and two racetracks in the United States and Canada and a two-thirds stake in Casinos Poland, said its net income was $4 million, or 13 cents per diluted share, for the three months ended Dec. 31, down from $6.7 million, or 22 cents per diluted share, a year earlier.
Analysts surveyed by Seeking Alpha had, on average, expected the company to earn 23 cents per share.
Century Casinos’ Canada segment was hit hard; overall fourth-quarter Canada segment net earnings were $859,000, down from $6.7 million a year earlier. The segment’s operating income for the quarter was $2.2 million, down from $9.2 million a year earlier.
Overall fourth-quarter adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 36.1% to $24.9 million from $18.3 million.
Fourth-quarter revenue rose 26.5% to $107.3 million from $84.8 million to top Seeking Alpha-polled analysts’ average $103.9 million estimate.
Century Casino shares fell $1.02, or 9.2% to close at $10.07 on the Nasdaq.
On a conference call with analysts and journalists, co-Chief Executive Officer Peter Hoetzinger said Canada has eased COVID restrictions and the company’s operations there are rebounding.
“Our other operations were also impacted by the omicron variant and COVID-related restrictions, as well as some supply and labor shortages,” he said. “But our team successfully navigated through all of that. … Our stronger performance is the result of a disciplined operating philosophy and effective targeted marketing for our high-value customers.”
On Feb. 23, Century Casinos said it would buy 50% of Smooth Bourbon, which owns the land and building underlying the Sparks Nugget, for $95 million, and all of Nugget Sparks LLC, which owns the casino operations, for $100 million, from Marnell Gaming. The combined $195 million deal awaits regulatory approval.
Under the deal, Century Casinos will have a five-year option to buy the rest of Smooth Bourbon for $105 million, plus 2% per annum. Smooth Bourbon would then lease the property to Nugget Sparks for $15 million annually.
In January, Century Casinos said its Century Resorts Alberta subsidiary would sell the land and building it owns in Calgary, Alberta, to Rowanwood Financial Properties for C$8.1 million (about $6.3 million U.S.).
As in previous earnings calls, Century Casinos said it plans to move its Carousel Casino in Caruthersville, Missouri, the state’s last remaining open-water riverboat, to a land-based casino with 20% more gaming positions and an attached 75-room hotel. That project will open in early 2024.
The company reiterated that it will also build a nine-story, 75-room hotel to attach to Century Casino Cape Girardeau. That project will open in late 2023.
The company had estimated combined costs for the projects at $68.3 million, but in its Tuesday earnings statement raised the cost estimate to $73 million.
The company also said the city of St. Louis in December sued to block the implementation of an omnibus bill that amended the definition of a floating facility. Century Casinos said the land-based casino project is delayed pending the lawsuit’s resolution or a stand-alone bill amending the floating-facility definition.
For the 12 months ended Dec. 31, Century Casinos had net income of $20 million, or 66 cents per diluted share, reversing a year-earlier loss of $48 million, or $1.62 per diluted share.
Twelve-month revenue rose 27.7% to $388.5 million from $304.3 million.
Follow Matthew Crowley on Twitter @copyjockey.
