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Golden Entertainment revenue down, costs up in Q3


Golden Entertainment’s revenue declined to $279.0m in the third quarter of 2022, even though operating costs increased.

Gaming made up the majority of revenue, bringing in $188.4m, a decline of 2.5% from Q3 of 2021.

Food and beverage revenue also ticked slightly down, as did revenue from rooms. Other revenue, meanwhile, rose to $16.7m, though this was not enough to prevent an overall decline.

Looking at revneue geographically instead, declines from Nevada resorts were the largest reason for revenue being down, with these venues bringing in $98.9m, down 5.3%. 

At the same time, revenue from Golden Entertainment’s Nevada local casinos, its Rocky Gap resort in Maryland – which it has agreed to sell – and its distributed gaming operations – such as slot machines at gas stations – all stagnated, with all being down but none by more than 1%.

Golden Entertainment CEO optimistic

Even though revenue declined, chief executive Blake Sartini remanded positive. He noted that revenue was still well above the levels recorded prior to the Covid-19 pandemic, and added that we has not concerned about the impact of inflation or a potential recession on Golden Entertainment’s business.

“Our quarterly results continue to be significantly above 2019 levels, despite reflecting a larger impact from seasonality compared to the same period last year,” he said. “We are encouraged by the current business trends to start the fourth quarter and we are well-positioned to succeed in any economic environment.”

Despite revenue being down, operating expenses increased by 2.8% to $243.9m. Operating expenses related to gaming, food and beverages and rooms all increased, as did selling, general and administrative costs.

As a result, the business reported an operating profit of $35.1m, down by 22.5%.

After $15.7m in interest expenses, up by 1.1%, Golden Entertainment was left with $19.2m in pre-tax income. It then paid $5.2m in tax for net income of $14.0m, which was less than half of the $29.1m recorded a year earlier.

As a result, the business reported earnings per share of $0.49, a sharp decline from the $1 per share in Q3 of 2021.

Golden Entertainment also recorded adjusted earnings before interest, tax, depreciation and amortization (adjusted EBITDA) of $18.8m, down from $21.2m a year earlier.

Rocky Gap sale

Sartini added that the Rocky Gap sale was a highlight of the quarter, as it would allow the business to be more focused while also improving Golden Entertainment’s cash position.

“Our third quarter was also highlighted by our announcement to sell our Rocky Gap Casino Resort for $260 million, which will allow us to focus further on our core operations, maintaining the strength of our balance sheet and opportunistically returning capital to shareholders,” he said.

Casino real estate investment trust Vici Properties will acquire the property itself for $203.9m, while Century Casinos will pay $56.1m to acquire its operations.