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aesars Entertainment on Tuesday released its third quarter 2021 financial results. The gaming giant posted net revenue of $2.7 billion, up from $1.4 billion in the prior-year period; and a net loss of $233 million, compared to a net loss of $926 million in 2020.
The quarterly net loss has proved to be a surprise for both company and shareholders. The company said it would have been more profitable if not for the fallout from Hurricane Ida, and a fire in Northern California.
The company also reported same-store Adjusted EBITDA of $882 million versus $433 million in Q3 2020, while same-store Adjusted EBITDA, excluding the Caesars Digital segment, was $1.0 billion versus $420 million in the comparable prior-year period.
Throughout the quarter, operating results reflected an all-time quarterly EBITDA record in the company’s Las Vegas segment, and a new third-quarter EBITDA record for the regional segment.
“We are encouraged by the early results from our rebranded Caesars Sportsbook launch and we are looking forward to launching additional states by year-end and into 2022,” said Tom Reeg, Chief Executive Officer of Caesars Entertainment, in a press statement.
Throughout the quarter, the company made a series of announcements. These include the appointment of Sandra Douglass Morgan, former Nevada regulator’s chair, to the company’s Board of Directors, effective November 7; and the release of a new CSR report, which highlights ESG achievements and updated long-term targets.
In terms of balance sheet and liquidity, as of September 30, Caesars has $15.2 billion in aggregate principal amount of debt outstanding. Total cash and cash equivalents were $1.1 billion, excluding restricted cash of $1.5 billion, which includes an amount designated for the repayment of the CRC Notes.
“As of October 19th 2021, we have repaid a total of $975 million of traditional debt on a year-to-date basis,” said Bret Yunker, Chief Financial Officer. “When combined with the repricing and issuance of lower-cost debt during the third quarter, our pro forma interest expense has been reduced by approximately $75 million on an annual basis. We expect further debt reduction to come from strong operating cash flows and expected asset sale proceeds.”
During the quarterly earnings call, Reeg offered insight on this asset sale. The company is moving faster on selling one Strip property, a move which was initially announced in August, with an estimated date for sometime next year. The CEO now said it will be happening “in the early part of 2022.”
“The playing field has been cleared with the Cosmo and Aria trades,” Reeg said. “We should encounter pretty robust demand for a center-Strip asset that frankly may be one of the last to trade for quite some time.”
The CEO did not elaborate on which property might be sold. However, he did say the company does not “expect to sell a second property.” The sale would generate plenty of cash for the company, one of its 2022 goals, which would also benefit from the sale of its William Hill non-US assets during Q1, 2022. The deal would report about $1.2 billion in net proceeds.
Caesars expects to have “in excess of $5 billion in cash,” said Reed, according to Las Vegas Review-Journal. While part of this money will be spent on the digital business and capital projects, a vast majority of the cash “is going to go to pay down debt.”
The casino operator expects to be able to push almost half of its conventional debt off of its balance sheet by the end of next year. This will lower its cash interest expense by $300 to $400 million a year, according to Reed.
