Caesars Entertainment blamed a weak Atlantic City market for a US$1.75 billion loss in the fourth quarter.
The Las Vegas-based casino giant reported an increase in net revenue of 3.2% to $2.07 billion for the 12 weeks ended 31st December. But it was nearly $2 billion in non-cash impairment charges, most of it tied to deteriorating operating conditions in Atlantic City, that ultimately impacted the bottom line. It resulted in more than a fourfold increase over the loss in the 2012 quarter, and it included charges of $102 million related to the company’s failed attempt to win a casino license in Massachusetts.
For the year, net revenue company-wide totaled $8.55 billion, essentially flat with 2012. The final loss was $2.94 billion, nearly double 2012’s.
Caesars had revealed the potential range of the loss earlier this month when it announced plans to sell Bally’s Las Vegas, The Quad, The Cromwell and Harrah’s New Orleans to its majority-owned subsidiary Caesars Growth Partners. CGP was spun off last year as a separate publicly traded company to focus on expansion and to help reduce Caesars’ industry-high debt, which is now $20.9 billion, down from $23 billion in the third quarter.
Caesars will operate the casinos as a joint venture with CGP, which also owns the Octavius Tower at Caesars Palace, Planet Hollywood Las Vegas, the company’s interactive division and the under-construction Horseshoe Casino Baltimore, which opens this summer.
“While the operating environment remained challenging in the fourth quarter, we are encouraged by volume and visitation trends in our core market of Las Vegas,” said Chairman Gary Loveman. “We are optimistic about the prospects for Las Vegas.”
Increases in room and food and beverage revenues boosted the top line 7.6% in Las Vegas to $799.4 million in the fourth quarter and 1.3 percent, to $3.07 billion, for 2013.
Caesars Interactive Entertainment, which oversees the World Series of Poker, online gaming and social gaming, grew annual revenues 52% to $316.6 million. The company did not break out results for its Internet poker business in Nevada.
Mr Loveman said during a conference call with analysts that improving the company’s capital structure “remain a key priority”.
“The process to address Caesars condition is well under way but will take quite some time to achieve.”
