Casino group Caesars Entertainment Corp (CEC) reported a full-year 2016 net loss of US$2.7 billion for its “Continuing CEC” unit.
The unit includes Caesars Entertainment Resort Properties LLC, and Caesars Growth Partners LLC, but excludes Caesars Entertainment Operating Co Inc (CEOC) – which according to the group’s corporate website, remains operator of some of the group’s most famous properties such as Caesar’s Palace in Las Vegas. The operating unit is still in the process of emerging from bankruptcy protection.
In January, a U.S. Bankruptcy Court in Illinois had approved the operating unit’s reorganisation plan, paving the way for a “successful conclusion to CEOC’s bankruptcy in 2017,” the group noted in Tuesday’s results filing to Nasdaq.
“This year, we intend to deliver additional cash flow and margin improvements while completing CEOC’s restructuring,” said Mark Frissora, president and chief executive of the group, in a statement accompanying the latest results.
“These actions will allow us to continue to generate more value for our stakeholders as we execute against our long-term plan,” he added.
The CEO said the group had delivered a second consecutive year of “solid operational improvement and margin expansion” driven by strong performance in Las Vegas, its largest market, and continued productivity improvements.
“We also generated record full year cash hotel revenues as we renovated over 8,000 rooms domestically since 2014,” Mr Frissora also noted.
Last month Steven Tight, the group’s president of international development, told GGRAsia that it was “pursuing a number of growth opportunities in Asia, including Japan”, and stepping up activity on its South Korea project.
Mr Tight noted the emergence of the operating unit from bankruptcy protection “was great news”, and added that it would “facilitate Caesars’ continued growth plans in the [Asian] region”.
The operating unit sought protection from bankruptcy via the U.S. courts in January 2015, weighed by a US$18-billion debt load. It was part of a plan to cut group debt by approximately US$10 billion.
The 2016 net loss at Continuing CEC excluded the impact of non-controlling interests but took account of the US$5.7-billion in accruals due other parties in relation to the operating unit’s restructuring. The group said this was “partially offset” by a gain of US$4.2 billion from the sale of Caesars Interactive Entertainment’s social and mobiles games business.
Full-year net revenues for Continuing CEC increased 2.8 percent to US$3.9 billion “driven by strength in Las Vegas due to favourable hold and improved hotel performance,” said the group.
Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) for Continuing CEC in full-year 2016 increased 8.6 percent to US$1.1 billion “driven by net revenue increases and efficiency initiatives,” said the group.
In the fourth quarter, net revenues for Continuing CEC increased 3.0 percent year-on-year to US$949 million.
The quarterly net loss for Continuing CEC, before including the effect of non-controlling interests, was US$435 million compared to a net loss of US$39 million in the fourth quarter of 2015. The change was mainly due to “a US$426-million accrual related to the restructuring of CEOC”.
Adjusted EBITDA for Continuing CEC in the fourth quarter grew 10.6 percent year-on-year to US$250 million.
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Credit rating agency Fitch Ratings