Red Rock Resorts has elaborated on an “unprecedented challenge” after reporting across the board declines in its latest trading update, with mandated casino closures across the US taking hold.
After the firm’s Las Vegas operations recorded their best operating performance in January and February since 2008, “circumstances abruptly changed” in mid-March due to the global health crisis.
The group, which owns a majority indirect equity interest in and manages Las Vegas focused gaming and entertainment firm Station Casinos, saw first quarter revenue drop 15.6 per cent from $477m to $377.4m due to the aforementioned shutdowns.
Net loss finished up at $177.8m during the period, down from an income of £20.3m, with a noncash charge of $113.2m related to the establishment of a full valuation allowance on certain tax assets added to the impacts of the closures.
Adjusted EBITDA came in at $74.3m, a 48.8 per cent drop from $145.1m a year earlier, including the impact of a $27m expense accrued within the quarter related to the company’s commitment to provide regular wages and benefits to all of its full-time team members for the period from April 1 to April 30, 2020.
Net revenue across the company’s Las Vegas operations was $356.5m, down 15.6 per cent from $422.4m, with adjusted EBITDA declining 49.2 per cent to $68.5m (2019: $134.8m). The latter amount includes the impact of the wage and benefit accrual referred to above, and offset in part by a Cares Act employee retention credit of $20m.
Adjusted EBITDA from Native American operations was $17.6m for the first quarter of 2020, an 18 per cent decrease from $21.5m in the same period of 2019, due to the temporary closure of Graton Resort and Casino.
On May 1, 2020, the company announced a phased reopening program with respect to its Las Vegas properties. Pursuant to that program, Red Rock expects to welcome patrons too its Red Rock, Green Valley Ranch, Santa Fe Station, Boulder Station, Palace Station and Sunset Station properties, together with its Wildfire properties, when permitted to do so by governmental authorities.
Furthermore, the operator will assess the performance of the first-to-reopen properties before reopening its Palms, Texas Station, Fiesta Henderson and Fiesta Rancho properties.