Caesars suffers heavy Q2 net loss despite online revenue rise
Operator makes "significant progress" in establishing infrastructure ahead of potential US online approval.
Caesars Entertainment has posted a large group net loss compared to the same period last year with its online division one of the only highlights, the casino operator announced during its second quarter results yesterday.
Caesars reported a net loss of US$241.7m in the second quarter of 2012, almost double the $155.56m decline in the same quarter a year ago. Income from operations fell from $231.6m in the corresponding quarter last year to $81.8m, a steep decline of $149.8m, mainly due to impairment charges of $101m related to a writedown in Macau, the company said in a statement.
“Following a strong start to 2012, the second quarter was marked by deteriorating economic indicators in the United States and uncertainty elsewhere in the world,” Caesars chief executive Gary Loveman said. “It won’t come as a surprise to any of you that the weakening US economy has led to a more difficult operating environment for our company and for the gaming industry broadly.”
Its overall net revenue, however increased incrementally by $4m to $2.17Bn. This was mainly due to increased profits from international and online operations, including Playtika, acquired in 2011, it said.
During an analyst call yesterday Loveman said he was optimistic about online poker being legalised in Nevada, with the first companies set to go live later this year.
“Nevada [has demonstrated] progress toward making it the first state to have operational online poker in the near future,” he said, adding that: “Caesars Interactive Entertainment has submitted an application to be an operator of the interactive gaming system here in Nevada, and we’ve made significant progress in establishing the infrastructure to support online poker operations in the US in line with expected regulatory requirements.”
The company has not recorded a profit since late 2009 and had $19.9bn long-term debt as of June 30 due to a leveraged buyout in 2008 led by venture capital firms Apollo Global Management LLC and TPG Capital. Similarly difficult results in Q1 saw heavy losses partially offset by encouraging online and social results.