entury Casinos reported today its financial results for the third quarter of 2019, revealing net operating revenue of $52.9 million, an increase of 22% year-on-year; and earnings from operations up by 8% to $3.5 million.
Adjusted EBITDA was $7.1 million, an increase of 12% year-over-year. Net earnings attributable to Century shareholders was $0.5 million, a decrease of 71% from the same period last year. Basic and diluted earnings per share attributable to Century shareholders were $0.02, seeing decreases of 67% and 60%, respectively.
"Operations at Century Mile continue to ramp up and we are pleased with the revenue generated at the property, which is in line with our expectations. We continue to analyze the cost structure, staffing levels and efficiencies of Century Mile to achieve the margins we expect, which is normal during the first phase of operations," Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos remarked. "We look forward to closing the Eldorado acquisition and see some short-term low-cost measures that we can implement to improve performance."
On June 17, the company entered into a definitive agreement to acquire the operations of Isle Casino Cape Girardeau, Lady Luck Caruthersville and Mountaineer Casino, Racetrack and Resort from Eldorado Resorts for approximately $107.0 million, which it expects to finance through a new credit facility. Simultaneous with the closing of the acquisition, VICI Properties will acquire the real estate assets of the three properties for approximately $278.0 million and Century will enter into a triple net lease agreement with VICI for the three casino properties. The lease will have an initial annual rent of approximately $25.0 million and an initial term of 15 years, with four five-year renewal options. The transaction, which is expected to close by year end, is subject to approval of the Missouri Gaming Commission as well as other customary closing conditions.
Analyst John DeCree said: "Considering there is less competition for smaller US regional casinos, CNTY is in a unique position to make additional opportunistic acquisitions at attractive multiples, further increasing its domestic exposure. We also see additional upside to our forecast in the event Coloradans vote in favor of Proposition DD at the ballot in November. This bill would allow the 17 companies that own Colorado’s 33 casinos to apply for master licenses, which permits a physical sportsbook at the casino and a partnership for online betting," according to Seeking Alpha, commenting on the referendum scheduled for Tuesday.