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Twin River income declines despite 2019 revenue growth


Twin River Worldwide Holdings saw revenue rise 19.8% to an estimated $523.6m, but net income declined 23.7% to $51.4m after increased financial costs, according to the operator’s preliminary year-end figures.

The majority of Twin River’s revenue for the year came from its two Rhode Island locations: its flagship casino and hotel in Lincoln and the Tiverton Casino & Hotel in Tiverton. These two casinos combined for an estimated $306.3m in revenue, up 1.2% year-on-year.

Twin River made $127.4m in revenue from the Hard Rock Hotel and Casino in Biloxi, Mississippi which it owns and operates.

The operator made a further $80.8m in revenue from Dover Downs Casino in Delaware, following its acquisition of the property last year.

Twin River earned a further $9.0m in revenue from other locations. This segment is likely to grow further going forward after the operator purchased three casinos in Colorado – the Mardi Gras, the Golden Gates and Golden Gulch – last month.

The operator’s preliminary EBITDA rose slightly year-on-year to $167.0m, though it did not break down the expenses that resulted in this figure.

EDITBA was again highest in Rhode Island, at $130.6m, but down 8.8% year-on-year. EBITDA in Biloxi increased slightly to $37.3m while EBITDA from Delaware came to $16.7m. In other locations, Twin River reported an EBITDA loss of $17.6m, a 22.2% larger loss than in 2018.

The operator paid $37.9m in interest expenses, up 65.5% year-on-year, and and $32.3m in depreciation and amortization, up 44.8%, though income tax payments for 2019 fell 24.3% to $20.0m.

Acquisition, integration and restructuring expenses came to $12.1m, up 77.9%, while share-based compensation came to $3.8m and professional and advisory fees to $3.5m.

This left a net profit of $55.2m, with a $71.1m net profit from its Rhode Island locations, $6.0m profit in Delaware and $18.2m from Mississippi offset by losses of $40.2m from other locations.

George Papanier, president and chief executive of Twin River Worldwide Holdings, said that the past year’s performance set the business up well for 2020.

“We’re excited about the progress we’ve made as we continue to transform the company,” Panaier said. “Over the last year or so, the steps we’ve taken to strategically and opportunistically grow and diversify the company, have created significant shareholder value, returned meaningful capital and leave us well positioned for long-term growth.”

For the fourth quarter of 2019, Twin River made $130.4m in revenue, up 17.1% year-on-year. Of this figure, $69.5m came from Rhode Island, $27.6m from Delaware, $31.2m from Biloxi and $2.1m from other locations.

The business recorded EBITDA of $40.1m, up 8.4% year-on-year. Of this $40.1m, $29.4 came from Rhode Island, $5.5m from Delaware, and $9.1m from Biloxi, while Twin River recorded a $3.9m EBITDA loss from other locations.

Twin River’s net income for the quarter fell 39.4% to $13.4m. This decline despite higher EBITDA came largely due to increased interest expenses of $11.0m and the fact the company recorded a gain of $8.8m because of share-based compensation in the fourth quarter of 2018. In the same quarter of 2019, it paid out $1.0m in share-based compensation.

Twin River noted that all of its figures for the fourth quarter of 2019 were still preliminary and were merely the midpoints in the range of figures within which the final result could fall. Revenue for the quarter is expected to fall between $129.4m and $131.4m, while the range for EBITDA is $38.6m-$41.6m and for net income $12.1m-$14.7m. Full-year figures, therefore, are subject to margins of error of equal size in absolute terms.

The Company estimates that its adjusted EBITDA for 2020 will fall around $180m, an increase of 8% from the estimated EBITDA for 2019.

“I am very pleased with the results of the fourth quarter, which reflect the continued stabilization in the New England market following the entrance of new competitors, and strong performance across our broader portfolio,” Papanier said. “We expect this momentum to continue into 2020, which is reflected in our full year 2020 guidance.”

Twin River said that this figure is based on the assumption that it will complete the acquisition of properties in Kansas City, Missouri and Vicksburg, Mississippi from Eldorado Resorts in the second quarter of 2020.

In January, Twin River and in-state rival IGT announced a new joint venture, with the aim of working together in Rhode Island to improve and expand gambling services in the state.

The agreement appears to have avoided a protracted dispute over the state lottery’s future, which followed Governor Gina Raimondo’s decision to award IGT a 20-year new contract without a competitive bidding process. This prompted Twin River to strike a partnership with Camelot Lottery Solutions and Scientific Games to put forward a competing proposal.