Continuous assessments for Churchill Downs with racing cleared for return

Churchill Downs
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Churchill Downs Incorporated has seen COVID-19 impacted closures have a significant impact on first quarter trading as the firm provides an update on the return to action at its flashship racetrack.

As revenue dropped five per cent during 2020’s opening period to $252.9m (2019: $265.4m), Churchill Downs Racetrack received approval from state officials to reopen its stable areas on Monday 11 May under strict guidelines to effectively mitigate the impact of the health crisis.

The home of the Kentucky Derby, which has shifted to September 5 from its original May 2 scheduling, says that opening day of the 2020 Spring Meet with spectator-free racing will be communicated in the coming days.

“There will be no fans for racing. I will tell you this is one of the most detailed plans that we have seen about specific security checks that everybody has to go through and be temperature-checked to masking to having a very limited group that is there,” explained Kentucky Governor Andy Beshear.

CDI, which began property closures on May 14 before announcing the temporary furlough of employees eleven days later, saw net loss finish at $23.4m for Q1 as opposed to income of $11.6m a year earlier. Adjusted EBITDA dropped 25.8 per cent to $55.3m (2019: $74.6m).

“We continue to assess the situation at our properties and operations on a daily basis; however, we are unable to determine when we will be able to reopen our properties and operations and the conditions upon which we will reopen,” the company noted in the financial report.

“Our second quarter of 2020 financial results will be materially impacted by the rescheduling of the Kentucky Oaks and Derby from the second quarter of 2020 to the third quarter of 2020, by the continued closure and suspended operations of our wholly-owned gaming properties and certain wholly-owned racing operations, and by the continued closure of the casino properties related to our two equity investments.”

The latest update is in stark contrast to that of two months ago when record fourth quarter and full-year EBITDA saw CDI laud an expanded US footprint in its 2019 review.

“During this unprecedented pandemic, we remain focused on the health and safety of our team members, customers and communities,” explained Bill Carstanjen, CEO of CDI.

“We appreciate the support we are receiving from our state and local government and regulatory officials as well as our community leaders who are reviewing our proposed safety protocols and working with us to determine the appropriate timing for re-opening our properties.

“Our strong balance sheet and the deep experience and resilience of our team will enable us to emerge from these challenging times as a stronger company ready to execute on all of the growth opportunities we have shared with our investors.”