Q3 Financial Results Of Red Rock Resorts

Article by : Helen Nov 10, 2020

• 
• 

Red Rock Resort is a leading gaming company that operates 21 casinos in the USA. Its Las Vegas gaming portfolio is just impressive and contains around 22,250 slot machines. Several days ago, the company reported Q3 financial results and surprised the world with the presented numbers. Red Rock Resorts has been continuing to re-open its properties, and by the end of September, seven properties, including Santa Fe Station, Sunset Station, and Graton Casino Resort, returned to work.

Talking about the financial situation, it should be said the company’s net income has increased up to $72m during the third quarter. Without any doubt, the pandemic has been good for the company as far as it kept losses of $26.8m in the same period in 2019. On the other hand, net revenues have decreased by 24.2% compared to the previous year, and the company received $353.2 million in the third quarter of 2020. Consequently, EBITDA – stands for Earnings before interest, taxes, depreciation, and amortization – is $160.9 million for the Q3. Compared to the same period in 2019, the company received a 44.8% or $49.8m increase.

In Q3, Las Vegas operations give the net revenue that is 27.2% lower than in 2019. So, the company receives $320.8m while adjusted EBITDA is $141.7m or $39.4m more than in the same period of 2019. Frank Fertitta III said a reduction in the cost of operating a business might be a permanent action that helps to strengthen their business.

The shutdown gave us the ability to question everything we were doing and to be very cautious reopening.

Stephen Cootey who is the company’s financial director said that the idea to cut down the costs was successful and resulted in $150m. Now the company is much more efficient, meaning it is easier to achieve better margins. There was also an important change in direct relationships with the customers, so the company focused its attention on their promotions and marketing. As far as not all hotels are allowed to reopen fully, Red Rock fired about 39% of full-time workers, and it is the other side of the coin.

Though the hotels and restaurants are profitable for the company, and now the losses related to their closure are significant, almost 80% of the company’s revenues come from table games and slots. It means Red Rock is truly a gaming company and can make money in the gaming environment. In stark contrast, operating revenues from food and beverages in the Q3 of 2019 were $128m, while in 2020 they decreased to $45,8m. Operating revenues from rooms declined by $26.1m.

In times of COVID-19 pandemic, the young generation is blamed for keeping the virus alive; however, it becomes the engine that keeps the Red Rock Casinos afloat. The company sees more younger people in its gaming halls, more time spent on devices, and its loyal customers came back as well. To get a bigger part of a younger demographic, Red Rock Resorts have an intention to make it possible to use a cashless wallet like the Bitcoin SV.

Despite the lockdown and pandemic in general, the company continues to expand its properties. They are going to start building a new resort in California in the second quarter of 2021. On the other hand, it is still keeping closed such properties as Texas Station, the Palms, Fiesta Rancho, and Fiesta Henderson.