Despite what can be described as modest growth in its financial outcomes, Red Rock Resorts Incorporated maintains a strong belief in its ongoing business strategy, which has led to an increase in revenue for 2023. This strengthening strategy includes the expansion through acquisitions and the introduction of new properties within the year.
The latest ventures include the Durango in Nevada, which greeted its first patrons in December, alongside the launch of Wildfire Fremont, nestled in the heart of downtown Las Vegas, which opened in February. Building upon its strategic footprint, Red Rock has not shied away from polishing its existing establishments, including a significant investment in enhancing Palace Station, also situated in Nevada. These upgrades, while necessary for growth, have a tangible impact on the company’s profits.
Stephen Cootey, the Chief Financial Officer at Red Rock, offered a statement underscoring the year’s successes. “In addition to showing strong financial results, 2023 was a year in which we continued to validate our long-term growth strategy across the Las Vegas Valley,” Cootey explained. He emphasized the importance of the new property developments, “The successful openings of the Durango and Wildfire Fremont properties not only validates our long-term growth strategy within the Las Vegas Valley, it also demonstrates the power of our own development pipeline and real estate bank.”
Cootey further expanded on the company’s expansion and internal investments, “Not only do we expand our physical footprint across the Valley in 2023, we continue to execute on our core strategy of reinvesting in our existing properties to deliver fresh and relevant amenities to our guests.”
As Red Rock looks towards 2024, Cootey tempers expectations with a cautious note, pointing to potentially challenging year-over-year comparisons and disruptions caused by ongoing renovations at the Palace Station.
Dissecting the year’s financials, the bulk of Red Rock’s revenue was sourced from its casino operations, which totalled $1.13 billion, a marginal increase of 0.5%. Other segments also saw rises, with food and beverage revenue climbing 10.8% to $313.6 million, room revenue growing by 11.3% to $183.1 million, and “other” revenue by 8.4% to $94.4 million, in addition to an extra $807,000 in management fees.
Operating expenses weren’t left behind, showing a 5.7% upsurge at $1.17 billion. Selling, general, and administrative costs accounted for $374.5 million of that, with casino costs ringing in at $294.0 million.
The company witnessed a profit before taxes of $380.8 million, which marked a downturn of 12.4% from the previous year. Tax expenditures reached $43.0 million. Red Rock also took into account $161.8 million of income attributable to non-controlling interests, which resulted in a dip of net profit by 14.4% to $176.0 million, compared to 2022’s figures. A spot of brighter news was found in the marginal elevation of adjusted EBITDA, up by 0.3% to $746.0 million.
Focusing on the last quarter of 2023, the patterns observed were akin to the annual results, with increments in revenue and adjusted EBITDA, but with net profit falling short of previous marks. Fourth-quarter revenue stood at $462.7 million, an 8.7% increase, with casino revenue leading at $301.7 million, trailed by food and beverage at $85.1 million, room revenue marking $52.2 million, other revenue at $23.5 million, and management fees at $205,000.
With a significant hike in operating expenses by 42.6% to $290.8 million, Red Rock still managed earnings of $802,000 from joint ventures. Nevertheless, the quarter’s pre-tax profits hit $124.0 million, falling steeply by 31.9% from the year before. After accounting for $15.1 million in taxes and discounting $52.6 million due to non-controlling interests, the net profit was set at $56.3 million, a sharp drop of 38.7%. However, in a more positive light, adjusted EBITDA increased by 3.6% to $201.3 million, ending the quarter on a somewhat positive note.
