Despite facing increased operational costs and a challenging economic climate, Century Casinos has reported a year of strategic expansion and construction projects that are setting the stage for the company’s future growth. In 2023, Century Casinos saw a significant rise in revenue across all its market segments, particularly in the United States, which served as the primary driver of this increase.
Throughout the year, Century Casinos ambitiously expanded its network, completing key acquisition deals to bolster its portfolio. The casino operator finalized the purchase of the remaining 50% interest in Nevada’s Nugget Casino Resort from Marnell Gaming in April 2023 for an outlay of $100.0 million. The expansion continued in July when Century acquired Rocky Gap Casino in Maryland for $56.1 million, a transaction that was originally agreed upon in July of the previous year.
In addition to the mergers and acquisitions, Century Casinos has been actively involved in large-scale construction initiatives in Missouri. The new Cape Girardeau hotel is poised to open in the upcoming month, and the anticipated completion of the Caruthersville casino and hotel is earmarked for late 2024. These developments are part of a broader strategy aimed at securing future growth potential.
Co-CEOs Erwin Haitzmann and Peter Hoetzinger have expressed optimism for the future despite the financial losses encountered in 2023, dubbing the past year a “transitional” phase for Century Casinos. This phase, they believe, positions the company for an upward trajectory starting from 2024 onwards. They are especially enthusiastic about a disruption-free 2025, following the full integration of newly acquired casinos into their operations.
From a geographical revenue standpoint, the United States was the star performer in 2023, with a staggering 41.7% increase to $380.6 million, boosted by the acquisition of the Nugget Casino Resort and Rocky Gap Casino. Century Casinos also reported a revenue increase in Canada by 5.3% to $75.4 million, reinforcing the solid financial performance across the North American market. Century’s operations in Canada span four land-based venues that contribute to the region’s vibrant gaming sector.
The European operations, specifically in Poland, also observed an uptick in revenue, albeit at a more modest rate of 4.3%, culminating in $94.1 million. This growth occurred despite the unexpected licensing delays resulting in the temporary closure of three casinos in the country during the fourth quarter. Century has since successfully secured all the necessary Polish licenses, with one casino already reopened and another set to commence operations before the end of March. The third is scheduled to open in a new location in the third quarter of the year.
Despite robust revenue outcomes, the group’s other and corporate revenue fell considerably, down by 70.4% year-on-year, totaling $61,000.
The brighter revenue news was, however, offset by substantial jumps in expenses. Total operating costs for 2023 reached $487.3 million, a 33.1% increase from the previous year, while non-operating costs soared by 42.7%, amounting to $87.9 million. Consequently, Century Casinos registered a pre-tax loss of $23.8 million, a stark contrast to the $6.0 million profit seen in 2022. Although a $5.3 million tax benefit was received, losses from non-controlling interests amounted to $9.7 million, leaving the company with a net loss of $28.2 million, compared to an $8.0 million profit in the prior year.
Nonetheless, the casino group did have some positive financial indicators, with EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent) showing a 10.4% increase to $114.0 million in 2023.
For the final quarter of the year, revenue boosted by 38.5% to $143.8 million, maintaining the pattern of growth, particularly in the US and Canadian markets. Polish market revenue, however, plummeted by 71.1% due to the aforementioned licensing delays. Corporate and other activities added a loss of $3.3 million to the tally.
Quarterly operating expenses surged by 44.0% to $131.2 million and non-operating expenditures rose by 52.4% to $25.0 million, resulting in a pre-tax loss of $12.4 million. After taking into account a $4.0 million income tax benefit and a $2.4 million loss from non-controlling interests, the quarter closed with a net loss of $10.8 million, which was over double the loss from the previous year but in line with projections.
Despite the financial setbacks, Century Casinos remains hopeful, taking solace in a 17.1% increase in EBITDAR to $25.4 million during the last quarter of 2023. With these financial underpinnings and ongoing developments, the company looks ahead to a potentially prosperous future, free of significant construction or renovation disruptions.
