Caesars Entertainment Corp reported that its consolidated net revenue topped US$2.13 billion in the fourth quarter of 2014, up by 6.3 percent from the prior-year period. The Las Vegas-based company reported a loss of over US$1 billion during the final three months of last year, down from US$1.76 billion in the final quarter of 2013.
Caesars, the largest U.S. owner of casinos and currently planning its expansion into Asia, said it is making good progress on the design phase of its South Korea project.
The firm is a partner in a consortium that plans to break ground this year on a casino project at Incheon in that country. The venue is scheduled to open in 2018.
On Monday, the casino operator said it would begin the process of acquiring government permits for the South Korean project “in the coming months”. The firm added: “With Chinese visitation to Korea growing by over 40 percent this past year, we are very excited about the prospects for our Korea project.”
Caesars’ fourth quarter results were supported by strength in social and mobile games and room revenue, but offset by unfavourable hold at its flagship casino, Caesars Palace (pictured), and increased operating expenses, it said on Monday.
The company, which operates casino resorts under brands including Caesars, Harrah’s and Horseshoe, said casino revenue rose 1.6 percent year-on-year in the fourth quarter to US$1.37 billion, mainly due to the addition of Horseshoe Baltimore.
“These increases to revenue were negatively impacted by approximately US$60 million of unfavourable year-over-year hold at Caesars Palace, higher start-up costs from new properties as well as new food and beverage outlets, and increased overhead expenses,” the company said.
Caesars, the largest U.S. owner of casinos, said fourth quarter adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) was US$372 million, down 8.4 percent from a year earlier.
Cost cutting measures allowed the company to save US$9 million in the quarter, Gary Loveman, Caesars chairman and chief executive, said in prepared remarks.
“Across the 2015 year, we expect to produce an incremental US$250 to US$300 million of EBITDA as a result of cost savings and EBITDA enhancing initiatives. The majority of our planned initiatives have already been implemented, and we anticipate robust flow through prospectively,” he added.
For the full-year 2014, the company reported that its loss narrowed to US$2.77 billion, from US$2.95 billion in 2013. Revenue was reported at US$8.52 billion, up by 3.6 percent year-on-year. Gaming revenue however fell 2.0 percent from the previous year to US5.42 billion.
In January, Caesars Entertainment Operating Co Inc (CEOC), the operating unit that owns and manages 44 gaming and resort properties, voluntarily filed for bankruptcy in Chicago, Illinois. It is part of a plan by Caesars to cut group debt by approximately US$10 billion.
Mr Loveman said the company would be “very engaged” with the execution of CEOC’s restructuring plan this year, “so that we can complete this process as quickly and efficiently as possible and realise additional cost savings to restore the health and long-term viability of CEOC”.
The executive announced he would step down as CEO of the parent company on June 30, although he will continue to serve as chairman of CEOC. Mark Frissora will succeed Mr Loveman as Caesars’ group CEO.
“Mark and I will work closely together to ensure a seamless transition and a productive start beginning on Day 1,” Mr Loveman said on Monday.
In late February, Caesars said it was selling its 20 percent interest in three Ohio casino properties – the Horseshoe Casinos in Cincinnati and Cleveland, and ThistleDown racino in Cleveland – to Rock Gaming LLC, but added the properties would still be managed by a Caesars subsidiary.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors