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Covid-19 closures push Red Rock to $223.7m loss in H1


Casino operator Red Rock Resorts said the enforced closure of its properties due to the novel coronavirus (Covid-19) pandemic was the main reason behind a $223.7m net loss for the first half.

Net revenue for the six months until June 30 amounted to $485.9m, down 47.8% from $929.9m in the same period last year.

All of Red Rock’s US casinos were forced to temporarily close from mid-March, in line with state orders to slow the spread of Covid-19, and did not start to reopen until June 4.

As such, casino and related revenue took a significant hit, with casino revenue down 42.1% to $283.9m in H1. Food and beverage revenue slipped 57.4% to $103.3m, while rooms revenue was down 53.2% to $45.6m.

Other revenue was also 47.4% lower at $27.8m, while Red Rock said that fees related to management were down 45.9% year-on-year to $25.3m.

However, the shutdown did mean that Red Rock was able to save on costs, with total operating expenses in the first half amounting to $576.8m, down 29.5% from $576.8m last year.

Casino costs were 32.7% lower at $114.9m, while food and beverage spend more than halved to $114.9m, and room costs were reduced from $40.8m to $27.1m. Selling, general and administrative expenses were cut by 20.6% to $166.5m, but depreciation and amortisation costs crept up 9.2% to $116.5m.

Despite lower spending, the sharp decline in revenue meant Red Rock posted an operating loss of $91.0m, compared to a profit of $111.6m at the same point in 2019.

After accounting for $370,000 in losses from joint ventures, as well as additional costs totalling $91.7m, this left Red Rock with a loss before tax totalling $183.0m, a huge contrast to $13.2m in profit last year.

Red Rock paid $113.2m in tax, which, coupled with $72.5m in losses related to non-controlling interests, meant it posted a net loss of $223.7m, compared to a profit of $7.5m last year.

“The unprecedented challenges presented by the Covid-19 pandemic have significantly impacted the Company’s business operations,” Red Rock said.

In terms of Red Rock’s performance in the second quarter, the majority of which was taken up by casino closures, revenue was down by 77.5% year-on-year to $374.4m.

Net revenue from Las Vegas operations in Q2 was $101.0m, down 77.9% from last year, but Red Rock said its properties in the Nevada city “showed strong performance” for the post-reopening period from June 4-30.

Operating costs were down 53.8% to $202.1m, but Red Rock posted an operating loss of $202.1m. Including all other expenses, loss before tax was $118.4m, and after paying $46.9m in tax, this left Red Rock with a net loss of $71.5m, compared to a smaller loss of $3.8m last year.