Red Rock Resorts has worked out a “unprecedented challenge” after announcing declines across the board in its latest trading update, with mandatory casino closures taking place across the Country.
After the Las Vegas operations recorded their best operating performance since 2008 in January and February, “circumstances abruptly changed” in mid-March due to the global health crisis.
Because of the aforementioned shutdowns, the group , which owns a majority indirect equity interest in and manages Las Vegas focused gaming and entertainment firm Station Casinos, saw first quarter revenue drop 15.6 per cent from $477 m to $377.4 m.
Net loss for the period finished at $177.8 m, down from a £20.3 m gain, with a non-cash expense of $113.2 m relating to the creation of a full valuation allowance on other tax assets attributed to the impacts of the closures.
Adjusted EBITDA came in at $74.3 million, a 48.8 percent drop from $145.1 million a year earlier, including the impact of the $27 million expenditure accrued within the quarter related to the company ‘s commitment to provide regular wages and benefits to all its full-time team members for the period April 1 to April 30, 2020.
Net revenue across Las Vegas operations was $356.5 million, down 15.6 percent from $422.4 million, with the adjusted EBITDA falling 49.2 percent to $68.5 million (2019: $134.8 million). The latter amount includes the impact of the aforementioned wage and benefit accrual, and partially offset by a $20 m retention credit for employees of the Cares Act.
Adjusted EBITDA from Native American operations for the first quarter of 2020 was $17.6 million, down 18 percent from $21.5 million in the same period of 2019 due to the temporary closure of Graton Resort and Casino.
The firm announced a phased reopening programme regarding its Las Vegas properties on 1 May 2020. Under this programme, Red Rock expects to welcome its Red Rock, Green Valley Ranch, Santa Fe Station, Boulder Station, Palace Station, and Sunset Station properties as well as its Wildfire properties, if permitted by the government.
In addition, the operator will assess the performance of the first-to-reopen properties before reopening its properties in Palms, Texas Station, Fiesta Henderson and Fiesta Rancho.