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Howard Stutz

Cosmopolitan of Las Vegas trims loss, sees revenue grow

15 August 2014

LAS VEGAS -- The Cosmopolitan of Las Vegas, which is in the process of being sold, grew revenue almost 17 percent in the second quarter and trimmed its quarterly loss.

The Strip resort, which operates as Nevada Property 1, LLC, said in a filing with the Securities and Exchange Commission Thursday it lost $13.6 million in the quarter that ended June 30. In the same quarter a year ago, the hotel-casino lost $25.2 million.

The Cosmopolitan, which opened in December 2010, has never reported an annual profit.

Revenue increased in all aspects of the resort operations during the quarter.

Overall revenue was $200.1 million, highlighted by a 67.6 percent increase in gaming revenue. Hotel revenue grew 13.5 percent, food and beverage revenue was up 2.5 percent and other revenue increased 12 percent.

Cosmopolitan CEO John Unwin said in a statement the property has been more focused on gaming and has grown casino revenue in the past six months by 40 percent to more than $100 million.

“Our strategy at The Cosmopolitan of Las Vegas has proven that we are on the right trajectory, as demonstrated by our substantial growth in gaming,” Unwin said.

In the first half of the year, Unwin said the resort is “outperforming” the Las Vegas market in both average daily hotel room rate and revenue per available room, a non-traditional reporting figure.

“Our second quarter 2014 financial performance affirms that The Cosmopolitan of Las Vegas brand and guest experience continue to resonate,” Unwin said.

In May, Cosmopolitan owner Deutsche Bank sold the resort to a subsidiary of the Blackstone Group, a multinational private equity investment firm, for $1.73 billion in an all-cash transaction.

Germany’s largest bank took ownership of the unfinished property in 2008 after its original developer defaulted on a loan and completed the 2,995-room hotel-casino.

The SEC filing did not discuss the pending transaction.

The deal is subject to approval of Nevada gaming regulators.

Last week, Producer Spiegelworld filed a breach-of-contract lawsuit that accused the Cosmopolitan of “sabotaging” the “Vegas Nocturne” show and shuttering its performances at the Strip resort.

In the SEC filing, the Cosmopolitan operators said the company took a $1.5 million impairment charge for the show’s closure. Cosmopolitan executives said in a statement last week the lawsuit was “entirely without merit.”