Caesars plots reopening as Q1 revenue drops 13.6%
Caesars Entertainment is planning to resume operations at some properties across its network when permitted by applicable government or tribal bodies, as the casino operator documented 13.6 per cent drop in Q1 revenues.
Publishing its latest financial report, following the shutdown of all North American properties in Mid-March, revenue closed at $1.83bn (2019: $2.11bn) as loss from operations came in at $66m (2019: +$240m).
Adjusted EBITDA finished at $299m (2019: $562m) due to lost revenues from property closures and labor costs in the month of March that were in-line with the prior year.
Caesars asserts that the declines follow a strong showing in the first two months of the year, when net revenue was up 12 per cent year over year driven by increases in all verticals across all regions, highlighted by strength in Las Vegas and Indiana,
Subsequent closures resulted in the performance of its ‘Las Vegas’ and ‘Other US’ segments seeing decreases in gaming, hotel, food and beverage and other revenues. ‘All Other’ dropped 12 per cent to $132m (2019: $150m) year-over-year, primarily due to lower gaming volumes in the UK as a result of property closures.
Once reopening becomes a possibility, Caesars will encourage network-wide social distancing practices consistent with recommendations from domestic and international authorities, including federal and applicable state and local public health authorities, and implement other enhanced health and safety protocols.
In Las Vegas, Atlantic City, Council Bluffs and Lake Tahoe, Caesars plans to reopen properties in phases in line with anticipated business demand.
Tony Rodio, CEO of Caesars Entertainment, explained “The public health emergency caused by COVID-19 has created extraordinary challenges and is impacting all aspects of society, including our business. While we posted our best operating performance since 2008 in the first two months of the quarter, circumstances changed dramatically in March as we temporarily shut-down all of our casino properties, consistent with directives from various governmental and tribal bodies.
“Our first quarter performance reflects the significant revenue declines we experienced as a result of the closures and stable year over year labour costs in March as we continued to provide pay and benefits to our team members for the first two weeks of the closure period.
“We are taking steps to prepare for reopening, when appropriate, with the health and safety of our employees and guests in mind. We are also aggressively managing all of our operating levers to strengthen our financial position and enhance our ability to reopen and recover, including making the difficult but necessary decision to furlough the majority of our team members.
“We look forward to welcoming back employees and guests at the appropriate time, and we believe our deep connection with our guests and the geographic diversity of our network positions us well when that time arrives.”