Q3 2020 Century Casinos Inc Earnings Call

Welcome to century casinos Q3, 2020 earnings conference call.

This call will be recorded.

At this time all participants are in a listen only mode.

Later, we will conduct a question and answer session.

I would like to introduce our host for todays call Mr., Peter Hoetzinger Mr. Hoetzinger you may begin.

Good morning, everyone and thank you for joining our earnings call.

With me on the call on my co CEO and the chairman of century casinos Erwin Haitzmann.

That's when it's our Chief financial Officer Margaret's paper.

That's always before we begin we would like to remind you that we'd be discussing forward looking information.

It's a number of risks and uncertainties that may cause actual results to differ materially from all forward looking statements.

The company undertakes no obligation to update or revise the forward looking statements.

As a result of new information future events or otherwise.

He provided detailed discussion of the various risks it doesn't always sees filings Indycar Chu to review these filings.

In addition throughout all core we refer to several non-GAAP financial measures, including but not limited to adjusted EBITDA.

Reconciliations of our non good performance and liquidity measures to the appropriate GAAP measures can be found in our news release and this is he filings available in the Investor section of our website at CMT by Dot Com.

I'll now provide an overview of the third quarter results and after that there would be a question and answer session.

[laughter] if it wasn't for the Corona pandemic, we couldn't be more excited.

On a consolidated basis, we achieved all time record numbers seem to third quarter. Despite these challenging conditions.

Net operating revenue of 95.7 million represents an 81% increase over Q3 of last year.

Adjusted EBITDA was 22.2 billion.

More than three times higher than in Q3 of last year.

These fantastic results clearly reflect the successful integration.

The three casinos, we acquired late last year and the tremendous progress our local operating teams have made things, we reopened or properties about five months ago.

The strong trends we saw in June and July continued throughout the third quarter.

Increase in spend per visit what time spent on device.

Plus decrease to turn off our core customer.

Weve assembled reduced capacity on our casino floors and limited and made it this far guest.

Overall dissipation Tri properties was down compared to last year.

But to be clear quickly rebalanced, our operating and marketing approach without compromising a great customer experience.

[noise] being selective with our amenities keeping strong controls on the promotional environment and staying focused on the high margin areas of our business brings expense reductions and new efficiencies.

Starting in significantly higher operating margins.

Why do we currently see the <unk> positive currents continuing.

Yes, little visibility regarding the impact the Corona pandemic would happen all markets going forward.

Yes, we see continued upside when the older demographics, they oftentimes no baby handler, he's comfortable returning to our casinos in higher numbers.

We also expect some of the newer younger customers, we couldn't books to regulatory success.

The third quarter was the first full quarter, including dairy soccer three properties, we acquired from Indorato in December of last year.

When we close the transaction.

He said it was a truly transformational deal for our company.

Now, we can demonstrate that with hard things.

Our net revenue almost doubled our EBITDA more than tripled.

Hey, just become a key to U.S. focused operation.

7% to 9% of our total EBITDA coming from the U.S.

17% from Canada, and 4% from Europe.

Let's now look at the performance on a segment basis, starting with Colorado.

What a great quarter for properties in Cripple Creek and Central City.

Net operating revenue was up 13%.

The adjusted EBITDA more than doubled the EBITDA margin jumped from 25% to 46%.

In Colorado, each city has different gaming floor restrictions.

Little Creek the full slot floor is open table games I expect it to remain closed for the remainder of the year.

In Central City. The Casino is currently operating at approximately 65% of the slot machines at the electric tapes are open.

For both cities Echo save stop at midnight.

But the casinos are able to operate 24 seven.

Why limitations on the number of slots devices are difficult to manage you see a significant increase in time on device.

With low volumes of players, but the players that do come I spending significantly more.

Our core customers as well as some new younger customers.

They're coming off guidance thing long and spending more.

During the quarter, we announced our third sports betting partnership deal with the typical.

Oh, three partnerships payoffs a percentage of revenue with the minimum guaranteed amount per year. This is without any investment or cost participation from our side. So it flows straight to the bottom line.

Well I mean that is a the circus sports site, it's up and running already.

T plan to launch next year.

On Tuesday, Colorado voters approved commitments 77, which authorizes the three gaming towns Cripple Creek Central City, and Black Hawk to remove the current hundred dollar makes one bit limited its ability to introduce new paper games such as baccarat.

Currently they became <unk> comprise less than 15% of total gaming revenue, which is well below the 25% of comparable regional gaming markets clearly.

Clearly, indicating significant upside for Colorado.

The improved paper game offerings will appeal to new customer segments and high with customers and we are well positioned to capitalize on this opportunity.

Moving onto Missouri, which which is our most important market in terms of EBITDA and cash flow generation.

At our two properties in Cape Girardeau, and carotid spiel about 95% of all slot machines, and approximately 53% or four table games positions are available to play.

And the results for the quarter were fantastic copy.

Compared to Q3 of last year, when he casinos were under different ownership.

Managed to grow net operating revenue by 4% and adjusted EBITDA by 33%.

The increase the EBITDA margin from 32% to 41%.

Obviously your properties has done a great job in focusing on serving the best customers in an environment of reduced operating expenses and highly targeted marketing.

As a consequence the.

The primary driver for these great results was an increase in the average better player that's approximately 16%.

Additionally, handle puts power has increased.

Guest appeared to be playing slightly faster embedding more.

Just driving the increase in revenue per player.

Furthermore, the slight decline that missions has primarily come from lower end players.

Play has remained strong since the properties reopened.

Okay.

Next is this the GGR, we reopened on mountaineer casino restrict and resort in early June.

Currently the gaming floor office, 86% of the slot machines and about 39% of the table games positions for play.

Some of the food and beverage outlets have reopened with limited hours of operation.

Convention space remains closed until tennis or printing with limited rooms available.

EBITDA was down 11%.

The third quarter started right of soft in July and early August.

Mainly because smoking was temporarily band at that time, and we only had less than half of the slot machines in operation.

From the Middle of August on we were able to allow smoking again and to increase the number of slots to where we are today.

That show positive results immediately with.

With September EBITDA up 13% year over year.

Currently hotel occupancy at mountaineer rounds that 88% from Sunday through Thursday, and at 98% on Friday and Saturday is.

Prompting us to reopen another wing of still Taylor with around 100 room shortly.

Additionally, we have just installed another 30 slots in the very popular smoking section.

Because of its resort character mountaineer with Greg did benefit from a softening or an end of the current the current situation more so than pure local casinos.

And he did also benefit when the over 55 demographic feels comfortable again to come out in large numbers. So we feel that's good upset.

Now, let's take a quick look at our operations in Canada Edmonton Calgary.

The gaming floors are currently operating approximately 60% of the total gaming machines.

I think the our comms and data center.

Until then.