CDI Reveals Q2 Revenue And Two Major Expansion Projects
Author: Joe Kizlauskas
Last Updated: 23rd February 2023
Churchill Downs Incorporated has reported record second-quarter revenue and adjusted EBITDA, as well as information on two major expansion projects.
First, three multi-year capital expenditures will be made to change important parts of Churchill Downs Racetrack, with the goal of providing “new, unique, and spectacular guest experiences for the Kentucky Derby in the future years.”
In addition, a $76 million expansion of Derby City Gaming will include the development of a hotel, extra gaming slots, and the expansion of present amenities to better serve and attract customers.
The facility will get 135,000 square feet of more space, as well as 200 additional gaming slots. The new location will eventually be able to accommodate up to 400 new gaming positions, as well as a VIP gaming area.
Fuelling ongoing growth
Bill Carstanjen, CEO of CDI said: “Derby City Gaming continues to exceed the company’s expectations. The expansion of this premier gaming property is intended to create an elevated experience for our guests that is inclusive of all their hospitality needs, and is anticipated to fuel ongoing growth in purse contributions for Churchill Downs Racetrack.”
Along with these expansion projects, CDI recorded record net revenue of $515.1 million, up from $185.1 million in 2020, when nationwide shutdowns were imposed owing to the worldwide health epidemic.
The company’s second-quarter net income of $108.3 million is up from a loss of $118.8 million the year before, with record adjusted EBITDA of $233.3 million, up from $30.1 million the year before.
When these data are broken down by the group’s primary reporting categories, ‘Gaming’ revenue reached $186 million (2020: $37.3 million), owing to the temporary suspension of operations of all properties, as well as the loss of revenue at each, in the previous year.
Increased operational efficiencies
Adjusted EBITDA increased to $119.8 million (-$1.8 million), owing to a $69.8 million increase from wholly-owned gaming locations and a $51.8 million increase from equity investments, both of which were related to increased operational efficiencies and the temporary suspension described earlier.
TwinSpires’ income grew to $135.9 million (2020: $121.7 million), because to a $7.2 million rise in horse racing and a $7 million gain in sports and casino, the latter of which was attributable to growth into new states and greater marketing and promotional operations.
Adjusted EBITDA fell from $38.7 million to $23.1 million, resulting in a $8.2 million loss in horse racing revenue, principally owing to an increase in marketing and promotional costs related with the 147th Kentucky Oaks and Derby, which had capacity constraints.
This was somewhat offset by an increase in net sales and a $7.4 million increase in the loss from the sports and casino division as a result of increased marketing and promotional activities, according to the company.
The group’s ‘Live and Historical Racing’ business had the highest revenue result in the second quarter, with $190.5 million (2020: $30.3 million) and adjusted EBITDA of $98.4 million (2020: $3.6 million).