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Century Casinos posts $58.9m H1 loss despite revenue growth


Century Casinos Inc. has reported a net loss of $58.9m for the first half of 2020, despite its US operations driving a 26.2% year-on-year increase in revenue for the period.

Net operating revenue for the six months through to June 30 totalled $123.8m, up from $98.1m in the first half of last year.

This increase was primarily down to growth within the US, with Century seeing its revenue in the country rocket 357.4% year-on-year to $77.3m. This was thanks in part to the acquisition of new casinos including the Isle Casino Cape Girardeau, Lady Luck Caruthersville and the Mountaineer Casino, Racetrack and Resort from the former Eldorado Resorts before Eldorado completed its merger with Caesars Entertainment.

Century runs five brick-and-mortar casinos properties across Colorado, Missouri and West Virginia, though all of these were forced to temporarily close in mid-March due to the novel coronavirus (Covid-19) pandemic and did not start to reopen until the start of June.

However, this growth was partially offset by declines in all other regions, with Canadian revenue slipping 45.4% to $20.9m and Polish revenue also falling by 38.9% to $24.5m. Like in the US, Canadian casinos were closed from mid-March to the start of June, while Polish properties began to reopen from May 18.

Corporate and other revenue, including cruise ships, was also down 62.3% to $1.1m for the period.

Century did not go into full detail on its costs for the first half, but it did state that total operating expenses for the period stood at $157.6m, up 71.3% on last year.

This meant that despite the increase in revenue, Century posted an operating loss of $33.9m, compared to a $2.0m profit from operations at the same point in 2019.

When also accounting for a further $21.9m in non-operating expenses, this saw loss before tax amount to $55.8m, a stark contrast to the $4.2m profit Century enjoyed last year.

After paying $3.1m in tax and benefiting from some $395,000 in non-controlling interests, this left Century with a net loss of $58.5m for the first half, compared to a profit of $503,000 in 2019.

In addition, adjusted earnings before interest, tax, depreciation and amortisation (EBTIDA) were down 41.7% year-on-year to $7.8m.

Looking more closely at the overall loss, and while US operations drove overall revenue up in the period, this area of the business posted the highest net loss, with this amounting to $43.7m compared to a profit of $2.2m last year.

Century also reported a $6.0m net loss from its Canadian division, while Polish activities led to a $1.2m loss, and corporate and other areas generated a net loss of $7.6m to $659,000.

Analysing the results, Century’s co-chief executives Erwin Haitzmann and Peter Hoetzinge said that the business was inevitably impacted by Covid-19, but expect performances to improve now casinos are open again.

During the Covid-19 shutdown, Century took a series of actions to cut operating costs, including furloughing most staff, implementing reduced work weeks for other personnel and temporarily reducing salaries to senior management on a voluntary basis.

“We are pleased that our operations have been able to achieve cash positive positions so soon after reopening,” Haitzmann and Hoetzinge said. “We continue to take social distancing and our customers’ health very seriously, and we continue to explore new ways to further improve customer safety.

“We would like to thank our customers, employees, communities and authorities for their cooperation and support both during and after our temporary closures.”

In terms of the second quarter, the majority of which saw Century’s properties closed, revenue was down 31.1% to $36.1m, despite US revenue rocketing by 170.5% to $23.8m.

Revenue in Canada fell 78.6% to $4.7m, while Polish revenue dropped 63.2% to $7.4m and corporate and other revenue 89.5% to $162,000.

Though overall operating costs and expenses were reduced by 23.4% to $38.2m, Century still posted an operating loss of $2.1m, compared to a profit of $2.6m last year.

Non-operating costs amounted to $10.5m, which in turn meant loss before tax was $12.6m. After paying $582,000 in taxes, and accounting for $590,000 in earnings from non-controlling interests, this meant Century ended Q2 with a net loss of $12.6m, much higher than a $565,000 loss last year.