Caesars Entertainment Corporation has reported a strong Q4 and 2019 full-year results showing a solid performance over the trading period. Nonetheless, the results were marred by a drop in full-year revenue from operations and Q4 net income due to high accelerated depreciation and cost of renovation incurred during 2018.
Starting in the fourth quarter, net revenues totaled $2.17 billion, up 2.6 percent year-on-year driven primarily by Las Vegas strength and growth across all regions, namely Iowa and Indiana, following the opening of new sportsbooks.
Strong consumer demand in Las Vegas resulted in higher sales, primarily in the hotel segment of the business, which resulted in a higher cash / customer ratio compared to the previous year, combined with a rise in occupancy.
Fourth quarter operating income increased by 77%, or $77 million, from $100 million to $177 million, while Q4 net income / loss decreased by $502 million, with revenue dropping by $198 million to $304 million. The company also reported a 2.8 percent, or $16 m, non-GAAP adjusted EBITDA increase from $567 m to $583 m.
Finally, for Q4, the non-GAAP adjusted EBITDA increased to $572 m, excluding the sale and lease of its Las Vegas Rio property, by 3.4% or $19 m.
Headline figures for the full year indicated a $8.39bn to $8.74bn increase in net revenue of 4.2 percent, or $351 m. However, full-year operating income decreased 16.4 percent, or $121 million, from $739 million to $618 million.
Net income / loss for the 12-month period decreased $1.50bn from a $303 m income to a $1.20bn loss. Over the era, non-GAAP adjusted EBITDA rose 4.2 percent, or $97 million, from $2.31 billion to $2.41 billion.
Tony Rodio, President and CEO, cited a focus on cost controls as helping to shift annualised spending by around $100 million since the beginning of 2019. He said: “We’re very pleased that we’re able to deliver these strong results that close the year 2019. We also have closed the previously announced sale of Rio in Las Vegas to Dreamscape companies in December and received $470m in cash. In January, we announced the sale of Harrah’s Reno to CAI Investments for $50m of net proceeds, which will be split 75% the VICI and 25% the Caesars.”
For Caesars’ drive to expand its sports betting activities, there was specific mention too. Rodio said: “We also continue to grow our sports betting business across the quarter and are pleased with the progress we’ve made over the past year. We now have 29 seasons branded sportsbooks across seven states.
“As a result of these installations, we have seen an increase in visitation, food and beverage buying particularly in Iowa, Indiana, and Mississippi. We have licenses approved to launch mobile sports betting in Pennsylvania, Indiana and Iowa, and plan to do this over the course of the first half of this year subject to regulatory approval.
“We reiterate our view of sports betting as being a key value driver for the company and anticipate expanding our footprint to more markets over time.”