Red Rock Resorts posted a year-on-year drop in revenue during the second quarter following a decline within its casino business.
The three months to June 30 were a mixed period for the land-based casino operator. Red Rock Q2 group and casino were down, but it experienced growth in other areas and net profit was also up.
Total revenue for the second quarter was $461.1m, down 1.4% from $422.2m in the same period last year.
The main sticking point for Red Rock was its casino business, where revenue dropped 4.0% to $269.5m. In contrast, revenue from food and beverage, rooms and other sources was up year-on-year.
Red Rock’s Las Vegas operations drew $412.6m of all revenue in Q2, down 1.8%. The other $3.6m came from corporate and other sources, an increase of 71.4%.
Reducing spend pushes Red Rock Q2 net profit up
Despite revenue falling, there were plenty of positives for Red Rock in Q2. Total operating spend was down 18.3% to $289.2m, mainly due to last year’s results including a $79.0m asset impairment charge. Without the charge from Q2 2022, operating costs increased by 5.2% year-on-year.
Lower costs offset the revenue drop, meaning operating profit hiked 84.3% to $127.7m, with $754,000 coming from a joint venture.
Red Rock also reported $44.3m in interest expense, leaving $44.3m in pre-tax profit, a rise of 105.7%. The operator paid $8.4m in tax, resulting in a net profit of $74.9m, up 131.2%.
Some $35.4m of this was from non-controlling interests. As such, bottom line net profit was $39.5m, a jump of $151.6m. However adjusted EBITDA declined 7.2% to $175.3m.
Casino decline fails to halt H1 growth
Red Rock also reported a drop in casino revenue in the first half, but still experienced a rise in group revenue. Coupled with Q1, total revenue in the six months to June 30 was $849.8m, an increase of 3.1%.
Casino revenue slipped 0.4% to $557.7m but was offset by growth across food and beverage, rooms and other sources.
Operating spend fell 6.3% to $585.6m, due to last year’s asset impairment charge. As such, operating profit climbed 32.3% to $265.8m.
Interest costs hit $86.8m, with pre-tax profit at $179.0m, up 23.0%. Red Rock paid $18.6m in income tax, leaving net profit of $160.4m, an increase of 25.7%.
With $76.2m of this coming from non-controlling interest, bottom line net profit amounted to $85.2m, up 31.4%. In addition, adjusted EBITDA edged up 2.0% to $375.0m.