Hurricane-related disruption in Atlantic City contributing to sending casino giant Caesars Entertainment (Nasdaq: CZR) to a net loss of US$249.1 million in the fourth quarter.
In releasing its Q4 and 2012 results this week, the company estimated that October’s Hurricane Sandy, one of the worst in US history, cost the company $40 million-$45 million in revenue and $35 million-$40 million in EBITDA, partly offset by the opening last May of the Horseshoe Cleveland in the US state of Ohio. In all, net revenues were down 4.3% in the October-to-December period versus the same period in 2011 Loss from operations was $343.6 million, compared with $198.8 million in Q4 2011, due primarily to the storm disruption and a number of non-cash impairment charges.
Adjusted EBITDA was down 9.8% year on year to $420.1 million.
All in, operationally it was a slightly soft quarter for Caesars,” Las Vegas-based Union Gaming Group said in a note to investors. “While the top-line was challenged due to macro weakness the company is doing a solid job on managing expenses. Atlantic City and Las Vegas were impacted by market specific issues. The Atlantic City market is likely the most challenged domestic gaming market and a second Philadelphia casino license and additional supply in Maryland certainly won’t help any. The company remains highly levered and the equity has been trading more on optionality to online poker then on operating fundamentals, in our view.”
Adjusted EBITDA for the year was essentially flat (minus-0.3%) at $1.94 billion on a slight increase in net revenues (0.2%) to $8.59 billion, driven by the Cleveland opening and a boost from the online business. Non-cash charges of more than $1 billion contributed to an operating loss of $313.4 million.
Net loss for the year was $687.6 million, or $5.50 per diluted share, most of that, $469.7 million, recorded in the fourth quarter, amounting to a per-share loss of $3.75.
