As the gaming industry navigates through a period of fluctuating fortunes, Century Casinos—a notable player in the scene—is reporting developments that paint a mixed financial picture for the fourth quarter. Dubbed a ‘transitional year,’ the preliminary results for Q4 signal a steepening net loss despite healthy revenue growth.
According to the preliminary data, Century Casinos is projecting revenues to land in the range of $140 million to $145 million for Q4. Such figures would mark a substantial hike from the $104 million reported in the same quarter of the previous year, with a midpoint increase of about 37.0 percent year-on-year. The news of revenue growth may seem heartening at first blush, but it comes with the caveat of ballooning costs.
In a detailed examination of its financial health, Century Casinos anticipates the net loss for the quarter to widen, falling somewhere between $9.8 million to $13.6 million. This decline is more pronounced when juxtaposed with the Q4 figure from the year prior, which stood at $4.0 million in net loss. This forecasted increase is attributed to higher costs that the business is contending with across the board.
The company did not delve fully into the minutiae of its revenue streams but did highlight certain recent progressions and strategic moves. These include the successful acquisition of new licenses for its gaming establishments in Poland, which had temporarily shuttered but are now poised for reopening. The Bielsko-Biala casino is on track to resume operations this month, followed by the Katowice location come March. The Wroclaw casino, which saw its doors close in November, is slated for a revival by mid-2024.
Concurrently, other ventures are unfolding stateside. The construction projects currently in progress at Century’s properties in Cape Girardeau and Caruthersville, both located in Missouri, are advancing on schedule and within budget constraints. The former is set to add a hotel to its offering in April, while the latter anticipates a dual casino and hotel launch prior to year’s end.
Steering the ship through these times are Century Casinos’ co-chief executives, Erwin Haitzmann and Peter Hoetzinger. They radiate optimism about the coming year, visualizing 2024 as a foundation-laying period in anticipation of considerable growth in 2025. The pair emphasized the integration of newly acquired entities, Nugget and Rocky Gap, into the company’s portfolio and the completion of the Missouri construction undertakings.
In alignment with plans for the future, they forecast $46 million in company-wide capital expenditures for 2024, exclusive of the Caruthersville project, which benefits from Vici’s financial provision.
The executives look forward to a 2025 when the fruits of labor across 2023 and 2024 can be fully realized, hopefully free from the disruptions currently experienced. This sentiment underpins their belief that the transitional phase will pave the way to more robust growth.
Scrutinizing the quarter ending December 31, 2023, the company anticipates various expenses to rise. Interest expense is projected to range between $24.5 million and $25.5 million, a stark contrast to the $17.0 million posted for 2022. In addition, depreciation and amortization might peak at $12.0 million, climbing from a lower $6.8 million. Moreover, taxes for the quarter could amount to $3.0 million to $5.0 million; by comparison, Century enjoyed a $500,000 tax benefit in 2022.
However, it’s not all a march of rising costs and expanding losses. The company can find some solace in its adjusted EBITDAR (earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs). The forecast predicts figures between $24.0 million and $26.0 million, an improvement from the $21.7 million in the last quarter of the preceding year.
Both Haitzmann and Hoetzinger express confidence in their cash position and capital expenditure strategies moving forward. They are committed to scouring every avenue for operating cost reductions, aiming to maximize earnings and cash flow. With an eye on the horizon, they are also evaluating methods to curb non-operating expenses.
As Century Casinos steers through turbulent financial waters, executives and stakeholders alike are buckling up for what’s heralded as a transformative year, laying the groundwork for a more prosperous and disruption-free 2025.
