Century Casinos, Inc. (NASDAQ:CNTY) Q1 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call highlights strong financial performance in Missouri, with significant revenue growth and improved EBITDAR margins. The company is focused on operational efficiency and expects improved cash flow and EBITDAR in 2025. Despite some uncertainty in guidance and vague responses on Polish asset divestment, the overall sentiment is positive due to strong revenue growth, successful new casino openings, and a proactive market strategy. The Q&A section did not reveal significant negative trends. Therefore, the stock price is likely to experience a positive movement in the short term.

Key Financial Performance

Revenue $130.4 million, no year-over-year change mentioned.

EBITDAR $20.2 million, with an estimated impact of $2 million from weather, leap year, and partial loss of sports betting revenue compared to Q1 last year.

EPS Reported EPS is $-0.67, compared to expectations of $-0.56.

Carded Gaming Revenue Increased by 1% year-over-year.

Uncarded Gaming Revenue Decreased by 2.5% year-over-year.

Total Visitor Volume Down 3% year-over-year.

Spend per Trip Increased by 4% year-over-year.

Missouri Carded Gaming Revenue Grew 12% year-over-year.

Missouri Uncarded Gaming Revenue Increased by 23% year-over-year.

Total Gaming Revenue in Missouri Up 17% or $2.1 million compared to Q1 of last year.

EBITDAR Margin in Caruthersville 43%, with expectations for further margin improvement.

EBITDAR Margin in Cape Girardeau 36%.

Colorado Carded Revenue Grew 7% year-over-year.

Colorado Uncarded Revenue Decreased by 36% year-over-year.

EBITDAR in Nugget Casino Resort Positive $700,000 this quarter, turnaround from negative last year.

Net Debt $255 million.

Net Debt to EBITDA Ratio 6.9 times, expected to decrease to below 6 times by year-end.

CapEx for Growth Projects Expected to be $4 million.

CapEx for Maintenance Expected to be $14 million.

Free Cash Flow Expected to improve significantly compared to last year.

EBITDAR in March Up 8% year-over-year.

EBITDAR in April Initial estimate shows an increase of 5% over last year’s April.

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Operating Highlights

New Sports Brand Launch in Canada: Introduced a new sports brand launch concept with great initial feedback and results.

Expansion in Wroclaw, Poland: Awarded a second license for a casino in Wroclaw, Poland, with plans to open in Q4 of this year.

Operational Efficiencies: Eliminated table games at both properties in Colorado, expected savings close to $1 million per year.

Cost Cutting Measures at Nugget Casino: Management’s cost cutting measures at Nugget Casino resulted in a turnaround of EBITDAR from negative to positive $700,000.

Share Buyback Program: Plans to buy back stock in the coming weeks to take advantage of the dislocated share price of CNTY.

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Risk or Challenges

Earnings Miss: Century Casinos, Inc. reported an EPS of $-0.67, missing expectations of $-0.56.

Weather Impact: Significantly more weather-impacted days throughout North America affected operations, estimated to impact EBITDAR by around $2 million.

Sports Betting Revenue Loss: The company experienced a loss of two-thirds of sports betting income in Colorado, amounting to approximately $0.5 million for the quarter.

Visitor Volume Decline: Total visitor volume decreased by 3%, primarily due to a reduction in visits from the 50-plus age group.

Economic Uncertainty: The company acknowledges a level of economic uncertainty affecting consumer behavior and spending patterns.

Supply Chain and Competitive Pressures: No significant competitive supply impacts anticipated this year or next, but the company remains cautious due to the current uncertain environment.

Debt Levels: The company has a net debt of $255 million with a net debt to EBITDA ratio of 6.9 times, which they expect to reduce below 6 times by year-end.

Operational Challenges: Ongoing operational challenges include managing costs and improving efficiency, particularly in light of weather disruptions and reduced sports betting revenue.

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Guidance & Outlook

New Casino and Hotel Performance: The new Caruthersville property generated $5.8 million more net revenue and almost $3 million more in EBITDAR in the first six months of operation, exceeding initial expectations.

Market Expansion: The number of patrons living 75+ miles from the Caruthersville property increased by 34%, indicating successful market expansion.

Sports Betting in Missouri: The company is finalizing partnership agreements for sports betting in Missouri, expected to go live towards the end of the year, which should deliver incremental high margin EBITDAR.

Operational Efficiency: The company is focusing on operational discipline and efficiency to improve profitability, with expected savings of close to $1 million per year from recent changes.

New Sports Brand Launch in Canada: A new sports brand launch concept in Canada received great initial feedback and results.

Divestment in Poland: The company is committed to divesting its Poland operations, with two interested parties emerging for potential sale.

Revenue Expectations: Despite challenges, the company expects upward trends in EBITDAR, with initial estimates showing a 5% increase in April compared to last year.

CapEx Projections: The company expects to spend $4 million for growth projects and about $14 million in maintenance CapEx this year.

Debt Management: The company anticipates a reduction in net debt to EBITDA ratio to well below 6 times by the end of the year.

Share Buyback Plan: The company plans to buy back stock in the coming weeks, balancing CapEx with returning capital to shareholders.

Long-term Business Outlook: The company expresses confidence in long-term prospects, citing improvements in consumer behavior and spending patterns.

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Shareholder Return Plan

Share Buyback Program: The company plans to buy back stock in the coming weeks, taking advantage of the dislocated share price of CNTY.

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Key Q&A

Q:Have you started to notice any softening in the consumer for your Canadian assets, whether that be from uncertainty related to the trade war or else derivative impact from energy prices starting to come in?

A:We think that we don’t really see any of the reasons that you mentioned as significant. It’s more — the lower revenue is not that significant, and it’s also due to weather and the one day gaming — one less gaming day. So, we’re not concerned.

Q:Can you give us an update on some of the growth initiatives at Rocky Gap? What strategies are currently in place or else being planned to help sort of broaden the encampment area and attract some more higher net worth overnight guests?

A:We’ve completed the renovations in the F&B area, and we have — we’re also ready with a great beach access, that investment was finalized late last year. So, we feel we have a better product for our hotel and resort guests right now.

Q:What has changed over that time, what you’re seeing that maybe the year-end outlook just doesn’t look as good as it did two months ago?

A:There’s just a lot of uncertainty out there. And we currently see since mid-March for the last six, seven weeks, we see a clearly positive trend, but it’s too short of a timeframe to project that out — to the full remainder of 2025, and that’s why we are a little bit more cautious.

Q:Are you looking for ways to monetize your casino database with any potential partners that might be interested in that?

A:The only thing that we potentially could see at the moment is that we partner up with the Alberta Gaming Commission with regard to sharing a database. I wouldn’t see any other opportunity in that context.

Q:Are you trying to reach out to more of these 75-mile and further out customers, maybe push a little bit more on marketing and promotions at this time just to grow the overall pie? Or are you managing to a bottom-line result in the near-term?

A:Definitely both. We proactively and aggressively want to push the revenue up. And as you correctly said, an interesting segment is the 75-plus mile customer base. We think we’ve got more opportunity there.

Q:With the increased interest on the Polish assets, do we still think this could come to a conclusion in 2025? What’s the adjusted timeline based on more interest for these?

A:As we sit here today, we believe so, but we were wrong already once. Late last year, when we said that we think it’s going to happen in ’24, we had — we were already drafting some documents and then the Board of the other side said no.

Q:Can you help us think about how much you would be willing to or have the capacity to buy back maybe on a quarterly basis?

A:We think we’ll start between now and our next earnings release in early August, we’ll start with a single-digit million dollar value — volume.

Q:Is that impacting either good or bad in the process?

A:The potential changes you are mentioning, they currently have not led to any new or additional significant interest.

Q:Is there any optimization you can do on the cost side in either of those properties?

A:Yeah, definitely. We are constantly working on that. And I think we’ve achieved some things and there’s certainly more that’s possible.

Q:Review of Unclear Management Responses

A:Management appeared to avoid giving a direct answer when asked about the specific timeline for the Polish assets, stating they believe it could conclude in 2025 but acknowledged they were wrong previously about the timeline. Additionally, when asked about self-help optimization on the cost side for the East properties, the response was vague, indicating ongoing efforts but lacking specific details.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

CNTY Transcript

Century Casinos, Inc. (CNTY) Q3 2025 Earnings Call Transcript

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The earnings call shows mixed signals: strong performance in specific casinos and regions, but weaknesses in others like Poland. Positive elements include record EBITDAR in some areas and strategic partnerships, while negatives involve vague management responses and challenges in Poland. The Q&A highlights cautious optimism but also uncertainty, particularly regarding consumer trends and capital allocation. Considering these factors and the market cap's unavailability, the stock price is likely to remain neutral in the short term.

Century Casinos, Inc. (CNTY) Q2 2025 Earnings Call Transcript

Positive8-8

The earnings call indicates strong financial performance in several areas, including impressive growth in Poland and improvements in cash flow and debt ratio. The strategic plan highlights new partnerships and operational efficiencies, with an optimistic outlook on upcoming quarters. The Q&A reveals positive sentiment from analysts, with explanations for lower stock repurchases and strategic responses to market trends. The company's share buyback plan and positive EBITDAR growth further support a positive sentiment, likely leading to a stock price increase of 2% to 8%.

Century Casinos, Inc. (NASDAQ:CNTY) Q1 2025 Earnings Call Transcript

Positive5-13

Century Casinos, Inc. (CNTY) Q1 2025 Earnings Call Transcript

Positive5-12

The earnings call indicates several positive factors: a successful new casino opening with strong revenue growth, a focus on operational efficiency, and a solid shareholder return plan via stock buybacks. Despite some year-over-year declines in EBITDAR and visitor volume, the company's strategic initiatives and optimistic outlook, particularly in Missouri, suggest potential for growth. The Q&A revealed management's proactive revenue strategies and continued cost optimization efforts, though some uncertainty remains regarding the Polish asset divestment. Overall, the positives outweigh the negatives, suggesting a positive stock price movement.

CNTY Slides

Century Casinos Q1 2025 slides: Widening losses despite stable revenue

2025-05-12

Century Casinos Q2 2025 slides: Revenue growth amid strategic review process

2025-08-07

CNTY Report

CENTURY CASINOS INC /CO/ 10-Q

10-Q

2024-11-04

CENTURY CASINOS INC /CO/ 10-Q

10-Q

2024-08-08

CENTURY CASINOS INC /CO/ 10-Q

10-Q

2024-05-09

CENTURY CASINOS INC /CO/ 10-K

10-K

2024-03-14

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