Red Rock braces for record-breaking year amid Q3 falls
Red Rock's revenue for the three months ending 30 September was $411.6 million, down 0.7% from £335.3 million or €385.2 million. While all other sectors saw growth in Q3, Red Rock claims this was because casino activity declined.
But it is still optimistic about growth for the entire year because to its strong performance in the past two quarters. Stephen Cootey, chief financial officer of Red Rock, even went as far as to suggest that the operator would have a record year in 2023.
"Consistent with our first-half results, the third quarter was yet another strong quarter for the company," Cootey stated. Our previous three quarters in terms of same-store net revenue, adjusted EBITDA, and adjusted EBITDA margin were in 2021 and 2022, respectively, making this one our third best Q3 in company history.
Strong visitation in our regional, national, and VIP segments continues to drive our positive performance when compared to last year's Q3. Thanks to this performance and the robust spend per visit across the majority of our portfolio, we were able to achieve adjusted EBITDA results and revenue close to record levels in our gaming sectors in Q3.
Quarter 3 revenue for casinos fell 3.4%
When we examine the data more closely, we see that the casino was the primary revenue generator in the third quarter. With a decline of 3.4% year-on-year, these pursuits brought in $272.7m in revenue.
Revenue from other operations grew, though, so it didn't decline any more. Room revenue increased by 7.4 percent to 42.0 million, food and beverage revenue by 4.3 percent, and other revenue by 3.5 percent to 24.0 million.
Profit for the quarter came in at $408.0 million, down 0.9% year over year, from the Las Vegas operations. The other $3.6 million in income was generated by corporate and other sources.
Red Rock's expenses rise as its net profit falls
Moving on to expenditure, Red Rock's operational expenses increased 5.6% to $289.1m in Q3. Selling, general, and administrative expenses accounted for the lion's share of overall rising costs, totalling $91.9 million.
Red Rock recorded $640,000 in profits from joint ventures and $45.5 million in interest expense. With this, the pre-tax earnings dropped 27.5% to $77.7m compared to the previous year.
The operator's net profit from its non-controlling interests was $32.9 million, after deducting $9.3 million in income tax. Consequently, Q3 net profit was $35.5m, a decrease of 28.4 percent.
A year-on-year decline of 3.7% from $181.9m to $175.2m was also recorded for adjusted EBITDA.
On pace for best complete year ever
Compared to the same period last year, sales in the nine months ending in September were $1.26 billion, an increase of 1.9%. The gaming industry brought in $830.5 million, the food and beverage industry $228.5 million, the hotel industry $130.9 million, and other industries $71.5 million.
In tandem with the increase in income, operational expenses were cut by 2.7% to $874.6m. The pre-tax profit was $256.7m, an increase of 1.6%, after deducting interest expenses of $132.3m and joint venture earnings of $2.3m.
Red Rock reported a net profit of $109.2 million from its non-controlling interests and paid an income tax of $27.9 million. As a result, Red Rock's net profit was $119.7m, an increase of 5.3% from the previous year.
Red Rock did report a decline of 0.9% to $544.7m in adjusted EBITDA for the period.
"Based on our current performance, we are expected to have our best financial year ever," Cootey stated after the first nine months of the year.
