Century Casino made Wall Street-pleasing headlines in the second quarter when it agreed to buy the operations of two casinos in Missouri and one in West Virginia; the news gave Century’s stock price a one-day 12 percent boost. But this week’s headline was mixed — a quarterly loss reversed year-earlier income and missed Wall Street forecasts, but a revenue jump topped them.
In a statement released Thursday, the Colorado Springs, Colorado-based company said it had a net loss of $565,000, or 2 cents per share, for the three months ended June 30, reversing year-earlier net income of $317,000, or 1 cent per share.
Century owns three hotel-casinos and a racetrack in Canada, two in the United States, one in England and, through a subsidiary, a two-thirds stake in Casinos Poland, and operates five ship-based casinos under agreements with TUI Cruises of Hamburg, Germany.
Analysts surveyed by Zacks Investment Research had, on average, expected Century Casino to have earnings of 7 cents per share. A write-down of assets and receivables related to the company’s casino onboard the Glory Sea cruise ship and acquisition costs figured in the loss.
In June, Century Casino paid $107 million for the operations of the Mountaineer Casino Racetrack and Resort in New Cumberland, West Virginia; Isle Casino Cape Girardeau in Cape Girardeau, Missouri; and Lady Luck Casino Caruthersville in Caruthersville, Missouri, from Eldorado Resorts.
Las Vegas-based VICI Properties bought the properties’ land for $278 million, and Century Casino signed a 15-year lease agreement with VICI for annual rent of $25 million.
Century’s second-quarter adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that excludes nonrecurring costs, rose 42.6 percent to $6.7 million from $4.7 million.
Revenue rose 32.3 percent to $52.4 million from $39.6 million, topping the $49.1 million estimate of Zacks-polled analysts.
During a conference call with journalists and analysts Thursday, Century co-CEO Peter Hoetzinger said the company’s Canadian casinos, which are in Calgary, St. Albert and South Edmonton, Alberta, were the company’s strongest performers, generating 42 percent of its consolidated revenue.
Hoetzinger said the Century Mile Racetrack, opened in April in South Edmonton, stoked that revenue growth.
“Revenue is 20 percent higher than the revenue generated at our very successful Century Downs facility in Calgary, and that’s a very good sign that’s in line with our ambitious expectations,” he said. “As with any new casino, it takes about a year to reach its potential, meaning, we have another three quarters or so of increasing penetration in the greater Edmonton market to get to the full potential of that facility.
“It is the same with the expense side of the new casino,” he added. “Higher expenses initially, but after a few quarters we will be able to generate more normal operating margin.”
Second-quarter revenue for its two Colorado hotel-casinos, in Century City and Cripple Creek, rose 3.5 percent to $8.8 million from $8.5 million.
Century Casino shares fell 7 cents, or 0.82 percent, Friday to close at $8.45 on the Nasdaq. The share price has risen 17.5 percent in 2019.
Follow Matthew Crowley on Twitter @copyjockey
