Caesars Unveils Second Quarter 2015 Results
Photo courtesy of Caesars Entertainment Corporation
Casino-entertainment provider Caesars Entertainment Corporation (CEC) released its second quarter 2015 results on Tuesday.
CEC, which owns Caesars Entertainment Resort Properties (CERP), 89 percent of Caesars Entertainment Operating Company (CEOC), and an interest in Caesars Growth Partners (CGP), reported several highlights in a release (all results exclude the operating results of CEOC following CEC’s reorganization under Chapter 11 of the United States Bankruptcy Code on Jan. 15, 2015).
CEC and its consolidated entities, excluding CEOC, reported a 17.4-percent increase in net revenue in the second quarter of 2015, compared to the second quarter of 2014, mainly due to strong performance at Caesars Interactive Entertainment (CIE), the openings of Horseshoe Baltimore and The Cromwell in Las Vegas, the renovation of The Linq Hotel & Casino and continued growth in hospitality amenities in Las Vegas.
CEC also reported an increase in adjusted EBITDA (up 55.6 percent to $347 million), primarily driven by marketing and operational efficiencies.
“Second quarter performance system-wide was strong, delivering the best quarterly EBITDA margins since 2007,” said Mark Frissora, president and CEO of Caesars Entertainment, via a release. “These results demonstrate our ability to deliver growth while driving operational efficiencies. We are focused on growing the business, continually improving efficiency and expanding margins. To support further improvements in profitability, we plan to invest more in our hospitality assets across the system, which generate some of the highest capital returns across the Total Rewards network of properties.”
CERP, which features The LINQ promenade and Octavius Tower at Caesars Palace Las Vegas, reported increases in net revenue (up 5.2 percent to $566 million), casino revenue (up 6 percent to $299 million), room revenue (up 8.7 percent to $138 million), and food and beverage revenue (up 2.2 percent to $137 million).
Growth in casino revenue was attributed to increases in slot revenue and “favorable hold year-over-year largely at Paris.” Favorable hold contributed an additional $8 million in adjusted EBITDA.
Growth in room revenue and food and beverage revenue was attributed to an increase in cash average daily rate (ADR) and an increase in outlets, respectively.
CGP, which owns and operates the majority of its six U.S. casinos in Las Vegas, reported increases in net revenue (up 32.6 percent to $390 million), casino revenue (up 39.2 percent to $245 million), room revenue (up 26.2 percent to $82 million), and food and beverage revenue (up 15.8 percent to $66 million). Increases were largely attributed to the debuts of The Cromwell and Horseshoe Baltimore, as well as the room renovation at The Linq Hotel & Casino.
However, Horseshoe Baltimore was reportedly “adversely affected” by the civil unrest in Baltimore in April and May, while Harrah’s New Orleans experienced lower gaming volumes due to a new smoking ban.
CIE, a subsidiary of CGP that owns and operates a business providing social and mobile games and the World Series of Poker, reported a major increase in net revenue (up 28.8 percent to $186 million).
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