Century Casinos’ second-quarter earnings and revenue both rise, but results mixed with analysts

August 14, 2022 10:20 PM
  • Matthew Crowley, CDC Gaming Reports
August 14, 2022 10:20 PM
  • Matthew Crowley, CDC Gaming Reports
  • Canada
  • United States
  • Alberta

Century Casinos said a post-COVID rebound in Canadian casino business helped boost its second-quarter fortunes, as earnings per share rose to top Wall Street forecasts. Revenue, despite also rising, missed forecasts.

Colorado Springs, Colorado-based Century Casinos, which is working to buy the Nugget hotel-casino in Sparks, Nevada, operates two casinos in Missouri, two casinos in Colorado, one casino in West Virginia, and four gaming properties in Alberta, Canada.

The company said its net income was $8.8 million, or 28 cents per diluted share, for the three months ended June 30, up from net income of $6.9 million, or 22 cents per diluted share, a year earlier.

The latest result topped the consensus 21-cents-per-share forecast of analysts surveyed by Seeking Alpha.

Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 17.8% to $29.8 million from $25.3 million.

Revenue rose 20.6% to $111.1 million from $92.1 million, but missed the $111.3 million forecast of Seeking Alpha-polled analysts.

During the quarter, Century entered a $350 million term loan and a $30 million revolving-credit facility with Goldman Sachs Bank USA. The deal replaces a credit agreement with Macquarie.

On April 1, Century Casinos bought 50% of Smooth Bourbon, which owns the land and building underlying the Nugget in Sparks, Nevada, for $95 million. Given regulatory approval, it will buy all of Nugget Sparks LLC, which owns the casino operations, for $100 million, from Marnell Gaming. Century said it expects the second transaction to happen a year after the closing of the first, which would put the full deal’s closure in April 2023.

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 the Nugget Sparks for $15 million annually.

In a February statement, Century co-CEO Peter Hoetzinger said economic-development projects, including plants for Google, Tesla, Apple, Switch, and Amazon, attracted his company to Reno-Sparks.

Century said Canadian operations’ revenue more than doubled to $19 million from $6.7 million and Poland operations’ revenue also more than doubled to $21.7 million from $8.7 million.

Century Casinos has 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.

Century shares fell 41 cents, or 4.63%, Friday to close at $8.45 on the Nasdaq Stock Market.

Follow Matthew Crowley on Twitter @copyjockey

Follow Matthew Crowley on Twitter @copyjockey.