Gaming giant Caesars Entertainment shared on Tuesday its financial report for the fourth quarter and full-year 2021. The company posted net revenues of $2.6 billion for Q4, up from $1.6 billion for the comparable prior-year period. For the full year, net revenues increased to $9.6 billion from $3.6 billion in full-year 2020.
The company has also posted a net loss of $434 million in the fourth quarter, compared to a net loss of $555 million the prior-year period; while it reported a net loss of $1 billion for full-year 2021, less than a $1.8 billion net loss in 2020.
“Our quarterly operating results reflect new fourth-quarter records for Adjusted EBITDA and Adjusted EBITDA margin in both our Las Vegas and Regional segments,” said Tom Reeg, Chief Executive Officer of Caesars Entertainment, Inc. “Caesars Sportsbook continues to exceed our expectations for new customer registrations, deposits and market share, especially in recently launched jurisdictions.”
In a call with investors, Reeg also discussed plans to sell one of Caesars’ Strip assets. While the idea dates from 2019, the Covid-19 pandemic forced the sale to be delayed, as the casino giant awaited for gaming and tourism to bounce back. But now, three years later, the appropriate time seems to have come.
Caesars CEO Tom Reeg
“The next time we talk to you about a Strip asset sale, it will be to announce that sale,” Reeg said Tuesday during the company’s fourth-quarter earnings call, reports Las Vegas Review-Journal.
Same-store Adjusted EBITDA reached $581 million in Q4, up from $348 million, while same-store Adjusted EBITDA excluding Caesars Digital was $886 million, up from $313 million. For the full year, same-store Adjusted EBITDA grew to $3 billion ($1.1 billion the prior year), while it amounted to $3.5 billion when excluding Caesars Digital (up from $981 million).
In terms of Strip operations, 2021 was marked by a recovery from pandemic-related slowdowns and measures introduced in 2020: occupancy rates for the segment during Q4 hit 86%, with weekends averaging 94%.
The company also lists as highlights for the year having exceeded its synergy target from its July 2020 merger with Eldorado Resorts, and its Caesars Sportsbook subsidiary now being live in 22 states and jurisdictions, of which 16 offer mobile wagering.
While Caesars showed optimism about the growth of its sports betting operations, the company also announced to investors a plan to sharply reduce advertising spending for its sportsbook product after having accomplished its customer acquisition target.
“You are going to see us dramatically curtail our traditional media spend effectively immediately,” Reeg told investors, according to Bloomberg. “We set out to become a significant player and it happened significantly quicker than we thought.”
The decision comes as Caesars managed to capture one of the coveted top spots in the New York mobile market. However, the competitive Empire State sports betting landscape has taken its toll among operators, which have engaged in a costly advertising and incentives war to become the early leader.
The company is now set to confine its marketing spending to new states it enters. Reeg further told investors that in the latest month in which states reported sports betting handles, the company managed to capture 21% of the US market share. Caesars’ shares jumped nearly 6% after the CEO announced the plans to reduce advertising spending.
In terms of balance sheet and liquidity, as of December 31, Caesars had $14.3 billion in aggregate principal amount of debt outstanding, while total cash and cash equivalents were $1.1 billion, excluding restricted cash of $642 million.
“In 2021, we completed our acquisition of William Hill PLC and applied strong operating cash flows to debt reduction of approximately $1.0 billion,” said Bret Yunker, Chief Financial Officer. “We expect to continue to reduce debt in 2022 through the receipt of asset sale proceeds and generation of significant free cash flow.”
Original article: https://www.yogonet.com/international/news/2022/02/23/61511-caesars-to-sell-strip-asset-after-record-q4-earnings-for-vegas-cuts-sportsbook-ad-spending
