Century Casinos reports net operating revenue of $388M for 2021; Q4 27% growth above forecasts

Century Casinos announced Tuesday its financial results for Q4 and the year ended December 31, 2021. The report showed that last year’s net operating revenue was $388.5 million, an increase of 28% in a year-over-year comparison, with an Adjusted EBITDA of $97.9 million, an increase of 102% in contrast to 2020. 

Earnings from operations were $68.5 for the entire year, and net earnings attributable to Century Casinos shareholders was $20.6 million, which represents a 143% increase from the previous year. Basic earnings per share was $0.70.

The fourth quarter of 2021 saw a net operating revenue of $107.3 million, up 27% from the same period in 2020, which surpassed Wall Street forecasts, as reported by the Associated Press. Adjusted EBITDA was $24.9 million, an increase of 36% in a year-over-year comparison. 

Earnings from operations during the quarter was $16.4 million, a decrease of 12% from Q4 2020. Net earnings attributable to Century Casinos shareholders was $4 million, a decrease of 41%, year-over-year. Basic and diluted earnings per share were $0.13. 

Century Casino in Central City, Colorado.

Mirroring most businesses in the world, the COVID-19 pandemic had an adverse effect on the company, which showed in 2020 results of operations and financial condition. That impact was also seen to a lesser extent in 2021, as the company’s US properties were open and operating during that period. 

Canadian properties reopened on June 10, 2021, and its Poland casinos returned to activity on May 28. 

In an official statement, Erwin Hatizmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos spoke about last year’s financial results and Q4’s numbers and said: “We would like to thank our team members for the enthusiasm and flexibility they have shown this year as we navigated operational restrictions and continuing changes brought about by COVID-19. Despite major restrictions at our Canada properties throughout the fourth quarter, we finished the year with strong results. We look forward to 2022 and seeing the increased potential of our properties as most COVID-19 restrictions have now been lifted. We are also excited about our upcoming acquisition of the Nugget Casino Resort in Reno-Sparks, Nevada and the continued expansion of our US portfolio”.

Looking ahead, Century Casinos plans to relocate its Caruthersville casino, currently the last remaining riverboat on open water in Missouri, to a land-based casino with an attached hotel, estimated to open in early 2024; and to build a hotel that will attach onto Century Casino Cape Girardeau, which is expected to open in late 2023. The company estimates project costs of $73 million. 

Nugget Casino Resort in Sparks, Reno.

On February 22, 2022, Century Casinos entered into a definitive agreement to acquire 50% of Smooth Bourbon and 100% of Nugget Sparks (Nugget Casino Resort in Sparks, Nevada) from Marnell Gaming for $195 million. The brand has received a commitment letter from Goldman Sachs Bank USA for $350 million in senior secured term loan financing to support the Nugget Casino Resort acquisition, refinance the company’s existing debt and for general corporate purposes. 

The Colorado-based operator will purchase a 50% interest in Smooth Bourbon for $95 million, which represents a capitalization rate of 7.9% based on preliminary 2021 numbers. Smooth owns the land and building underlying the Nugget, and will enter into a lease of the property to Nugget Sparks for an annual rent of $15 million. The company will also have a five-year option to purchase the remaining 50% of Smooth for $105 million, plus 2% per annum.

Following required approvals from the Nevada Gaming Commission, the company will purchase 100% of Nugget Sparks for $100 million, which represents and implied earnings before interests, taxes, depreciation and amortization, as adjusted EBITDA before pro forma rent expense.

The acquisition of the Nugget is expected to “meaningfully enhance the company’s free cash flow as well as be immediately accretive to earnings”, the company stated in an official press release. 

Century Casino Calgary, Alberta.

In January 2022, the company’s subsidiary Century Resorts Alberta entered into a definitive agreement to sell CRA’s land and building in Calgary, Alberta. The sale occurred in February. Upon closing, CRA stopped operating Century Sports and transferred the lease agreement for the casino premises to the buyer. The deal was valued at CAD 8.1 million ($6.5 million). 

On December 1, 2020, Century Resorts Alberta sold the casino operations of Century Casino Calgary located on the property and leased the portion of the property containing the casino premises to the purchaser. Calgary accounted for 7% of Century Casinos’ net operating revenue in 2020, prior to the sale.