Riviera Posts Larger 3rd Quarter Loss Than Expected
The Riviera was expected to post a large third-quarter loss, but the numbers that were handed down on 14 November were much wider than previously estimated. This is mainly because of the non-cash expense that the company utilized to write down the value of a number of different assets. The property on the strip of Las Vegas as more than 2000 rooms, and reported a loss of $19.6 million, much higher than the $4.9 million the company lost a year ago during the same quarter. The net revenue for the company fell a total of $19.7 million to a total of $18.3 million over that time span, showing a huge loss that was not expected by many analysts throughout the industry.
Much of the loss that the company reported was related to a one-time expense for an impairment of goodwill for a total of $11.2 million. However, there were still losses on top of that that added to the total $19.7 million drop in total revenue.
The huge losses come as a bit of a surprise because the visitation the Las Vegas has picked up considerably this year, over previous years. Many casinos felt the sting after the 2008 financial collapse, and struggling economy, People from coming to the Las Vegas area to enjoy the gambling that they provide. The company saw losses across the board including in their casinos, the rooms that they rent, food and beverage, and even entertainment. The hotel occupancy fell from a total of 78.2%, to just 74%. The average daily rate of the rooms also fell a total of $1.31.
The game table output increase the total of $500,000 to a total of 13 million. However, the casino played quite unlucky throughout this time seeing their win percentage fall from 14.4% down to just 11.6%. The overall table revenue was 1.5 million, down nearly 17% overall on the quarter. The play of slots increased from 96 point $6 million-$99 million wagered, but the overall wind fell a total of $500,000. The overall casino revenue fell 6.2% to a total of $8.3 million in that time. Shortly after the numbers were released, the company released a statement explaining the numbers, and also going over strategy changes that they will be undergoing in the future.
“We believe that consumers have and will continue to save more and spend less on discretionary items such as vacations and gaming,” Riviera’s parent company commented in its financial report.
They also went on to say that based on the current circumstances, they believe that the company will continue to see lower occupancy numbers than previously thought, as well as room rates and overall casino volumes.
The company fell in the hot water earlier in the year when it technically defaulted on some of the credit agreements that they had previously reached. A number of analysts had warned investors that the company was going to be taking larger losses than originally expected, but not many predicted the losses to be as large as has been reported. In all, the Riviera has a total of $75.6 million in long-term debt. After today’s report, the casino stated that they will be speaking with lenders about resolving some of that debt for default.