Cue the Dramatic Music: Century Casinos Shuffles its Cards
So here we are, folks! Century Casinos, Inc. (NASDAQ: CNTY) has just dropped its third-quarter earnings like it’s the final act of a magician. And spoiler alert: it’s a bit of a mixed bag, like finding out your takeaway pizza has pineapple on it—some people love it, others? Well, let’s not go there!
The Numbers: A Game of Highs and Lows
First off, let’s look at the numbers—because every round of applause should start with a “1, 2, 3.” Net revenue came in at $156 million, down a rather underwhelming 3% year-over-year. You could say that their financials are a bit like a magician’s disappearing act—only this time the revenue didn’t vanish, it just took a tiny step back, like your mate after an awkward comment at a party.
Then there’s adjusted EBITDAR (which, let’s be honest, sounds like an 80s robot’s name), sitting at $32.9 million, down just 1%. But wait! Hold your applause because, despite the dips, they’ve managed to sneak a tiny improvement in their EBITDAR margin from 20.6% to 21.1%. A round of applause for effort, please!
The Road Ahead: More Bright Lights and Big Ideas
Now, some glimmers of hope! The reopening of Century’s Polish casino is expected to contribute a dazzling $10-12 million to the annual EBITDAR. I can just picture it: a flashing neon sign reading “Welcome Back, Couldn’t Live Without Us!” And let’s not forget about the shiny new casino and hotel in Missouri—opening with record revenues, no less! I mean, who doesn’t like a bit of specific glitz?
Good News, Bad News
Okay, let’s break it down.
- Negative Points:
- Revenue drop attributed to the temporary closure of the Polish casino and a pesky neighbor—competition in the Canadian market that’s hotter than a poker table in July.
- Stable revenue from the Midwest segment. Yawn… It’s like a road trip with the quiet kid in the back seat.
- Positive Points:
- The East segment recorded a spiffy 7% increase in revenue—this isn’t the East from *Game of Thrones*, mind you, but pretty epic nonetheless.
- Reno’s Nugget Casino reported a jaw-dropping 40% sequential revenue increase. Someone’s on a roll!
- Dreams of growth via operational efficiency and event planning. Get ready, it’s a party…in the future!
Share Buybacks and Future Aspirations
Ah, the sweet sound of share repurchases! Century Casinos is toying with the idea, and it’s planning to kick off some buyback activities. Executives have their eyes set on 2025, forecasting a pleasant EBITDAR of $150 million. Isn’t it nice to know there’s something to look forward to in five years? Like an awkward family reunion!
InvestingPro Insights: Money on Fire
Despite all the heart palpitations over cash flow—using $119 million to battle $340 million in debt—InvestingPro throws in an interesting curveball. The stock’s up like a daredevil on a bungee cord, showing a 45.1% return in a month. But with cash burn cited as “rapid,” one has to wonder if someone’s left the casino lights on for too long.
Conclusion: Keep an Eye on the Pot
In a nutshell, Century Casinos is spinning plates, and while some are wobbling, others are twirling gracefully. The company is flirting with a bright future—if it can manage its debts without needing a lifeguard—while ensuring its patrons are more excited than ever. So, keep those cards close to your chest, folks! Century is ready for the next round, and who knows? There could be a royal flush in our midst! Or at least some chips—just don’t let them slip away.
Century Casinos, Inc. (NASDAQ: CNTY) disclosed in its earnings report for the third quarter of 2024 that it experienced a modest dip in net revenue and adjusted EBITDAR, reporting net revenue of $156 million—a 3% decrease compared to the same quarter last year. The company’s adjusted EBITDAR also fell to $32.9 million, reflecting a 1% decline. Nevertheless, Century Casinos has achieved a noteworthy improvement in its EBITDAR margin, which has climbed from 20.6% to 21.1%. The company remains optimistic about future growth prospects, particularly with the anticipated impact of reopening its casino in Poland—projected to contribute between $10-12 million to annual EBITDAR—and the successful launch of a new casino and hotel in Caruthersville, Missouri, which opened to record revenues.
Key Points
- Net revenue of $156 million, down 3% year-over-year.
- Adjusted EBITDAR of $32.9 million, down 1%.
- EBITDAR margin improved from 20.6% to 21.1%.
- Reopening of the Polish casino expected to add $10-12 million to annual EBITDAR.
- The Caruthersville casino and hotel debuted with record-breaking revenues.
- Eastern segment revenue saw an impressive increase of 7%, while the Midwest segment revenue remained stable.
- Cash and debt at the end of Q3 stood at $119 million and $340 million, respectively.
- CapEx for 2023 is projected at $38 million, with a plan to reduce it to $16 million in 2024.
- The board is exploring share repurchases, with a pre-existing approval allowing up to $15 million for this purpose.
- Company executives express a positive outlook for 2025, with anticipated EBITDAR reaching $150 million.
Business Perspectives
- Century Casinos anticipates that the majority of EBITDAR growth in 2025 will stem from the recent openings and operational efficiencies that they are implementing.
- Free cash flow is expected to be between $25 million and $30 million next year, with $80 million earmarked for debt repayment and stock repurchases.
- Considerable contributions to 2025 EBITDAR are expected from the company’s locations in Caruthersville, Cape Girardeau, and Reno.
Negative Points
- The revenue decline is largely attributed to the temporary closure of the Polish casino and heightened competition in the Canadian gaming market.
Positive Points
- The East segment experienced a commendable revenue increase of 7%.
- Reno’s Nugget Casino reported a remarkable 40% sequential revenue increase, underlining the strength of this location.
- Optimism surrounding future growth is buoyed by operational efficiency enhancements and improved planning for events.
Missed Objectives
- A decline in Canadian revenues due to the cessation of a significant event and competition from a nearby establishment has impacted financial performance.
Highlights of the Question and Answer Session
- The executive team discussed plans for share buybacks, emphasizing the positive influence of reopening the Polish casino on their financial recovery.
- Company executives offered illustrative guidance for 2025, projecting EBITDAR at $150 million.
- Plans for share buyback activities are anticipated to commence either late this year or in early next year.
Century Casinos remains committed to regularly updating investors as it navigates the competitive landscape of the gaming sector and capitalizes on strategic growth opportunities.
InvestingPro Insights
Century Casinos’ latest earnings report unveils a multifaceted financial scenario, further clarified by insights from InvestingPro. In spite of the slight revenue and adjusted EBITDAR decline, the company’s stock has demonstrated robust performance in recent months. Notably, InvestingPro data reveals a total price return of 45.1% over the past month and 38.58% over the past three months, indicating a positive outlook from investors regarding the company’s future trajectory.
However, underlying this optimism are some noteworthy financial challenges. A tip from InvestingPro reveals that Century Casinos is “burning through cash rapidly,” aligning with the company’s reported cash position of $119 million against a significant debt burden of $340 million. This rate of cash expenditure could hinder the company’s capability to implement its growth strategies and execute planned share repurchase initiatives.
Another noteworthy insight from InvestingPro emphasizes that the company “operates with a significant debt burden,” particularly relevant as Century Casinos explores potential stock repurchases alongside projecting its expected free cash flow of $25-30 million in the upcoming year. Balancing effective debt management while delivering shareholder returns will be critical to the company’s ongoing financial viability.
InvestingPro also provides 11 additional recommendations for Century Casinos, offering an in-depth analysis for investors interested in understanding the company’s financial standing more comprehensively.
This article was generated and translated with the support of artificial intelligence and reviewed by an editor. For further information, please see our T&Cs.
### Century Casinos Earnings Overview: Q3 2024
Century Casinos, Inc. (NASDAQ: CNTY) reported its earnings for the third quarter of 2024, revealing a slight dip in financial performance but potential for future growth.
#### Financial Highlights
– **Net Revenue**: $156 million, a 3% year-over-year decrease.
– **Adjusted EBITDAR**: $32.9 million, down 1%.
– **EBITDAR Margin**: Improved from 20.6% to 21.1%.
Despite the decline in net revenue and adjusted EBITDAR, the company’s EBITDAR margin has shown progress, hinting at improving operational efficiency.
#### Growth Prospects
Century Casinos is optimistic about future revenue generation:
– **Polish Casino Reopening**: Expected to contribute $10-12 million to annual EBITDAR.
– **New Casino and Hotel**: Recently opened in Caruthersville, Missouri, achieving record revenues from its inception.
#### Segment Performance
– **East Segment**: Enjoyed a 7% revenue increase.
– **Midwest Segment**: Remained stable, indicating consistent performance.
#### Financial Management
– **Cash Position**: At the end of Q3, cash stood at $119 million while debt amounted to $340 million.
– **Capital Expenditures**: Projected to be $38 million in 2023, with plans to reduce it to $16 million in 2024.
– **Share Repurchases**: The board is exploring buybacks and has approval to repurchase up to $15 million of shares.
#### Future Outlook
Company executives expressed confidence in achieving an EBITDAR of $150 million by 2025, attributed to new operational efficiencies and revenue growth from recent openings.
### Positive and Negative Factors
**Negative:**
– Revenue decline mainly due to the temporary closure of the Polish casino and increasing competition in the Canadian market.
**Positive:**
– The East segment’s growth and a significant revenue boost of 40% sequentially from Reno’s Nugget Casino indicate areas of strength.
### Conclusion
Century Casinos is navigating a challenging landscape with a strategic focus on debt management, operational improvements, and potential growth avenues. The company is well-positioned to capitalize on forthcoming opportunities, making it essential for investors to stay informed about its ongoing developments in the gaming sector.