Casino operator Caesars Entertainment Corporation ended 2019 with another nine-figure net loss, in yet another instance of what the striving company’s chief exec calls a ‘solid’ performance undone by the annoying need to service its debt.
On Tuesday, Caesars informed revenue increasing 2.6% year-on-year to $2.17b in the last three months of 2019, while operating income grew 77% to $177m. However, the company reported a net loss of $304m in Q4 as opposed to a net profit of $198m in Q4 2018.
For the year overall, revenue grew 4.2% to $8.74b while operating income dropped 16.4% to $618m and the company reported a net loss of $1.2b as opposed to a $303m profit in 2018.
In what has become quite customary, CEO Tony Rodio said the stats showed “another quarter of solid operational performance,” which makes one ponder if a teenage Rodio was equally skilled at spinning a failing score on a book report to his parents. “When you think of it, Dad, an ‘F’ is only five letters from an ‘A’ but it’s 20 letters from a ‘Z’!”
In any case, Rodio credited the full-year revenue increases to contributions from Caesars’ purchase of two Centaur Gaming properties in Indiana, solid results in Las Vegas and a better than anticipated hold at the company’s gaming tables which boosted revenue by as much as $65m.
Caesars’ Vegas division informed revenue increasing 4.2% to $989m in Q4, while the ‘Other US’ unit grew 1.8% to $1.03b. The ‘All Other’ segment dropped 2.6% to $148m, partly due to decreasing gaming volume at Caesars’ high-end UK casinos.
Regarding the positive side-effects of legal sports betting, Rodio resounded the opinions of other casino operators, which Caesars offers at 17 casinos outside Nevada currently. Rodio said betting has tempted previously dormant customers of the company’s Total Rewards program to come and try out the sportsbooks, boosting revenue at non-betting facilities in the process.
As reported by calvinayre.com, Caesars’ net losses were credited to costs related with juggling the company’s exceptional debt, which continues to linger long after the company’s bankruptcy and reorganization few years ago. Caesars paid $1.37b only in interest on its debt last year while damage charges on land and buildings and gaming rights grew by $406m.
More challenges may be awaiting if Vegas begins reporting coronavirus cases. Although no guests have still reported exposure to the virus, Rodio expressed worry that local travelers could choose to give Vegas a wide berth “for the fear of interacting with Asian clientele.”
Caesars keeps making progress toward its planned collaboration with rival Eldorado Resorts later this year; however, Rodio refused to speculate on rumors which Eldorado CEO Tom Reeg would be interested to unload some of Caesars’ Vegas properties post-merger. On Wednesday, Eldorado will issue its own financial report card.
