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Best of Chris Sieroty

Gaming Guru

Chris Sieroty
 

The Cosmopolitan posts first-quarter loss; casino revenues spike

13 May 2013

LAS VEGAS -- Nevada Property 1 LLC, the parent company of The Cosmopolitan of Las Vegas, might have posted its ninth consecutive quarterly loss, but casino revenue at the luxury resort posted double-digit gains, topping increases in nongaming revenues.

The Strip hotel-casino on Friday reported a loss of $24.7 million for the first quarter of 2013, compared to $23.4 million last year. The Cosmopolitan, which opened on Dec. 15, 2010, lost $56.8 million in the first quarter of 2011, its first full quarter of operations.

Net revenues were $159.5 million, up from $143.1 million last year.

The $3.9 billion resort posted its best quarter in terms of casino revenue, generating $40.87 million, a 32.6 percent increase from $30.83 million in the first quarter of 2012. The increase was “due to the performance of our table games,” the company said in an earnings filing with the Securities and Exchange Commission.

The table games hold was 14.3 percent in the first quarter, beating expectations of 10 percent to 14 percent and 9.5 percent reported last year.

Average daily room rate and occupancy continued to be near the top of the market at $273 and 87.8 percent, respectively, generating revenues per room of $238. In the first quarter of 2012, average daily room rate was $253, occupancy was $86.8 percent, and revenue per room was $220.

Food and beverage revenue again topped the earnings chart, generating $74.6 million, compared with $71.7 million last year. Entertainment revenue was $7.6 million in the first quarter, up slightly from $6.8 million posted last year.

EBITDA, earnings before interest, taxes, depreciation and amortization, was $21.1 million, compared withy $22.1 million in the first quarter of last year.

Operating expenses were $187.3 million, up 4.4 percent from $179.4 million in the second quarter of 2012.

The company said it has ongoing efforts focused on restraining the growth, and in some cases, reducing department operating expenses, resulting in higher operating margins.

Contact reporter Chris Sieroty at csieroty@reviewjournal.