Penn National Gaming (PNG) has reported revenue of $1.51bn (£1.1bn/€1.3bn) for its third quarter 2021 results ended September 30, though profit declined due to non-operating expenses.
This revenue total was up 33.8% compared to the third quarter of 2020.
Most of the revenue came from PNG’s Northeastern properties, which recorded $672.4m this quarter, up 23.3%. Its Southern properties recorded the second highest revenue at $318.2m, which was a rise of 24.4% year-on-year. The Midwestern properties brought in $285.7m, up 25.5%. Properties in the West generated $145.7m. Revenue raised from other segments – including digital – came in at $96.5m.
Breaking revenue down by type of operations, gaming generated $1.25bn of the total, up by 26.4%. Food, beverage, hotel and other revenue made up the remaining $255.6m.
Operating expenses, however, also grew significantly. Gaming costs of sales reached $652m for the quarter, up 42.4% year-on-year. General and administrative costs, at $376.5m, and food, beverage and hotel costs at $160.1m further affected operating income. Depreciation and amortization costs at $83.7m remained the same year-on-year while impairment losses were not recorded.
In total, operating expenses came to $1.27bn. This was an increase of 36.3% compared to the same period in 2020, and left operating income at $239.1m, a 29.8% rise year-on-year.
In considering non-operating expenses, interest costs came to $144.9m. However, other income added $28.3m, dow significantly from 2020, bringing the profit total before income taxes to $122.5m.
After income taxes of $36.4m, the total net profit for the period totaled at $86.1m, down by 39.0% year-on-year.
“As the Delta outbreak reminded us in the third quarter, the environment remains uncertain while the future looks bright and we believe we can continue to generate revenue and adjusted EBITDA above 2019 levels,” said Felicia Hendrix, executive vice president of PNG on the company’s Q3 earnings call.
Jay Snowden, president and CEO of PNG, outlined the successful launches throughout the quarter.
“We achieved many significant milestones in the third quarter,” said Snowden. “We successfully launched the Barstool Sportsbook mobile app in five states, which more than doubled our footprint.”
“In addition, we opened Hollywood Casino York to strong initial results, began to roll out our market leading cashless, cardless, and contactless technology across the portfolio and continued to derive multiple tangible benefits from our highly differentiated omni-channel strategy.”
Last month, PNG completed its acquisition of theScore in a $2.0bn cash-and-stock transaction.
The deal was announced in August. As part of it, PNG agreed to pay $17.00 in cash and $17.00 in its stock for every share of theScore. As such theScore shareholders now own 7% of the new business combination, while Penn shareholders have the remaining 93%.
On PNG’s earnings call, Hendrix commented on theScore acquisition and what it means for PNG’s growth strategy.
“We remain focused on growth even after our acquisition of theScore,” said Hendrix.
“We are excited about what lies ahead and we continue our evolution ito being North America’s leading digital sports content and entertainment company.”
Also as part of the deal, PNG will migrate its Barstool-branded betting offerings to theScore’s new platform, which is under development. Barstool currently uses a Kambi sportsbook.