Caesars Entertainment Corporation has published its Q1 trading update revealing  revenue ahead by 7.3% to $2.12bn. However, the firm has shown a net loss of $217m primarily due to a $322m change in the fair value of the derivative liability related to the conversion option of CEC’s 5% convertible senior notes maturing in 2024.

Eric Hession, Executive Vice President and Chief Financial Officer, updated investors, saying: “Caesars delivered another solid quarter of revenue and EBITDAR growth, as well as margin improvement. We realized strong contributions from the Las Vegas gaming and hotel businesses, and Centaur, in addition to further operating and corporate efficiencies.

“These results were partially offset by the impact of competition in Atlantic City, and weather-related property closures. In addition, we generated strong cash flow from operations, which allowed us to pay off our $100m revolver balance.”

Net revenues increased $143m driven primarily by a $52m increase in Las Vegas net revenues and an $84m increase in other US net revenues resulting from the acquisition of Centaur. Excluding Centaur, other US net revenues were $884m for the first quarter of 2019, a decrease of $42m from 2018 primarily due to increased competition in Atlantic City and inclement weather across some of the firm’s regional properties which resulted in prolonged closures.

Weather negatively impacted other US net revenues in the first quarter by approximately $32m compared to a negative impact of $25m in the prior year. The increase in Las Vegas net revenues was primarily due to favorable hold, improved slot volumes and higher hotel revenues. Las Vegas ADR increased 2.1% while RevPAR increased 4.9%.

Income from operations increased $115m primarily due to growth in the Las Vegas region, as well as the post-acquisition results of Centaur, which contributed $30m to income from operations in 2019. Excluding Centaur, income from operations increased $85m primarily as a result of the increase in net revenues in the Las Vegas segment, offset by higher investment around technology and non-union labor costs.

First Quarter Highlights

  • Net revenues increased 7.3% to $2.12bn.
  • Income from operations increased 92% to $240m.
  • Net loss attributable to Caesars was $217m. Basic loss per share totaled $0.32.
  • Non-GAAP hold adjusted net revenues increased 5.6% to $2.11bn.
  • Non-GAAP adjusted EBITDAR increased 8.5% to $562m.
  • Non-GAAP hold adjusted EBITDAR increased 2.8% to $558m