Eldorado Resorts has become the latest in a string of US casino operators to report a sharp covid-19 impacted decline in first quarter revenue following a bright opening to the year.
After a “very strong start to the year” saw revenues and EBITDA up 6.6 per cent and 24.7 per cent, net revenue finished at $473.1m, representing a 25.6 per cent decline from $635.8m. Excluding divested properties revenue was reported to have fallen 17.5 per cent to $573.2m.
The company also reported an operating loss of $123.2m, as opposed to an income of $123.6m a year earlier, with adjusted EBITDA dropping 33 per cent to $102.5m (2019: $166.6m).
Tom Reeg, CEO of Eldorado Resorts, commented, “Our first quarter operating performance through the end of February 2020 represented a very strong start to the year. For the first two months of 2020, revenues were up 6.6 per cent and adjusted EBITDA was up 24.7 per cent, driving strong margin growth of 390 basis points year over year.
“We were encouraged by the strength of the consumer and the pace of revenue growth for this two-month period. However, the strength in January and February was offset by COVID-19 related weakness due to the mandated closure of all our properties by March 18, 2020. As a result, Eldorado generated first quarter same-store net revenues of $473.1m and EBITDA of $102.5m, down 17.5 per cent and 33.0 per cent year over year, respectively.
“Our primary focus since the mandated closure of our properties has been the safety and well-being of our team members and guests. We responded quickly to reduce costs and preserve liquidity following the closures and ended the first quarter of 2020 with over $670m of cash on the balance sheet after drawing $465m on our revolver in March.
“Our full-time team members received four weeks of pay after operations were suspended and we will continue to pay team member health care benefits through June 30, 2020. Compensation for the executive team has been reduced as well.
“We remain actively engaged in satisfying the remaining steps to complete the Caesars transaction. Our teams also remain focused on the integration process and we remain excited about the long-term opportunity to create value for stakeholders of both companies.”
Events after the quarter have seen a definitive agreement entered regarding the sale of the Eldorado Shreveport Resort and Casino and MontBleu Resort Casino & Spa to Twin River Worldwide Holdings for $155m.
“We have a very strong liquidity position which will allow us to weather the short-term weakness due to COVID-19 mandated closure of our properties. In addition, we continue to expect the announced $230m sale of our Kansas City and Vicksburg properties to Twin River to close in the current quarter following receipt of customary regulatory approvals,” Bret Yunker, CFO of Eldorado added.