Century Casinos’ Earnings Call: Optimism Amid Challenges

Century Casinos ((CNTY)) has held its Q1 earnings call. Read on for the main highlights of the call.

Century Casinos’ recent earnings call reflected a cautiously optimistic sentiment amidst a mix of challenges and positive developments. Despite facing headwinds such as weather impacts and a loss in sports betting revenue, the company demonstrated strong performance in areas like Caruthersville and showed positive EBITDAR trends in March and April. The focus remains on operational discipline and improvements, indicating a hopeful outlook for the future.

Strong Performance in Caruthersville

The new Caruthersville property has been a standout performer, generating $5.8 million more in net revenue and nearly $3 million more in EBITDAR during its first six months of operation. Visitor numbers surged by 23%, with revenue and EBITDAR increasing by 25% and 31%, respectively, showcasing the property’s robust growth and appeal.

Positive Trends in Missouri Properties

Both Caruthersville and Cape Girardeau properties in Missouri experienced increased visitation. Caruthersville’s gaming revenue rose by 17%, while Cape Girardeau saw a 5% increase in patrons, highlighting the strong performance of these locations and their contribution to the company’s overall success.

Nugget Casino Resort Turnaround

The Nugget Casino Resort in Sparks, Reno, Nevada, marked a significant turnaround, moving from a negative EBITDAR last year to a positive $700,000 this quarter. This marks the second consecutive quarter of improvement, signaling a successful recovery and operational enhancement.

Improved March and April EBITDAR

March EBITDAR saw an 8% year-over-year increase, and initial estimates for April indicate a further 5% rise compared to last year. These improvements reflect the company’s effective strategies and operational efficiencies.

Plans for Stock Repurchase

Century Casinos has announced plans to repurchase stock in the coming weeks, driven by the dislocated share price of CNTY. The initial repurchase volume is expected to be in the single-digit million dollar range before the next earnings release, indicating confidence in the company’s future prospects.

Weather and Sports Betting Impact

The quarter faced challenges due to adverse weather conditions, one less operating day, and a loss in sports betting revenue in Colorado, resulting in an estimated $2 million negative impact on EBITDAR. Despite these setbacks, the company remains focused on overcoming these obstacles.

Visitor Volume Decline

Total visitor volume declined by 3%, primarily due to a reduction in visits from the 50-plus age group. Overall trips decreased by 2%, although spend per trip increased by 4%, suggesting a shift in consumer behavior.

Challenges in Colorado

The Colorado segment faced difficulties, with Central City experiencing a 36% decrease in uncarded revenue and a 9% decline in slot revenue. Cripple Creek also saw a reduction in uncarded play, highlighting the challenges in this region.

East Segment Struggles

The East segment faced struggles, with Rocky Gap seeing a 13% decrease in trips and revenue declines attributed to lower slot volume. Mountaineer also experienced challenges with a decline in uncarded revenue and lower-tier segments.

Canadian Operations Decline

In Canada, total revenue decreased by 10% due to lower hold percentages and FX headwinds, reflecting the challenges faced by the company’s international operations.

Forward-Looking Guidance

Century Casinos provided forward-looking guidance during the earnings call, reporting Q1 2025 revenues of $130.4 million and EBITDAR of $20.2 million, despite various challenges. The company ended the quarter with $85 million in cash and a net debt to EBITDA ratio of 6.9 times, expecting this to drop significantly by year-end. With no significant CapEx planned and a focus on operational efficiency, Century Casinos aims to improve free cash flow and plans to repurchase stock opportunistically.

In summary, Century Casinos’ earnings call highlighted a mix of challenges and positive developments, with a cautiously optimistic sentiment. The strong performance in Caruthersville and positive trends in Missouri properties were key highlights, along with the turnaround at the Nugget Casino Resort. While challenges remain, particularly in Colorado and Canada, the company’s focus on operational improvements and strategic initiatives provides a hopeful outlook for the future.