Earnings by Ray Poirier | Feeling the effects of deteriorating economic conditions and high fuel prices, Riviera Holdings Corporation (RIV) reported declines in net revenue, operating income and hotel occupancy rates during the second quarter of the current fiscal year that ended on June 30.
Net revenues, the company said fell to $45.6 million from last year’s $53.7 million. Income from operations was $5 million, down from last year’s $9.4 million and room occupancy at its Las Vegas Strip facility was 85% compared to 95% in 2007.
Also affecting business in Las Vegas, said William Westerman, chairman and CEO, was the impact of neighboring construction projects.
"Most of our revenue loss was attributable to less play on our slot machines at both properties," Westerman said. He also included the loss of business at the Black Hawk Casino that now operates under a smoking ban.
Net income for the six months of the fiscal year was $4.3 million or $0.34 per share on a fully diluted basis, a decrease from $6.1 million or $0.49 per share last year.
"While it has been a difficult first half of 2008," Westerman said, "the financing we secured in 2007 enabled us to reduce interest costs by $5.5 million for the six months that ended June 30. We have reinvested these savings into our room renovation project at our Las Vegas property, which is proceeding on schedule."
Westerman also explained that the company’s $9.3 million gain on the company’s "interest rate swap derivatives" had no effect on cash or cash equivalents. He said it was reflected as a long-term liability and was listed as approximately $12.3 million as of June 30.
Isle of Capri Casinos
Isle of Capri Casinos Inc. (ISLE) reported that it had narrowed its first quarter loss from last year’s $7.1 million to $3.6 million for the three months that ended on July 27.
On a per share basis, the loss was $0.12 each while last year’s loss was $0.23 per share. Although analysts had expected a loss of $0.04 per share, one individual said he thought the loss would be closer to $0.18 per share.
Net revenues for the reporting period reached $282.3 million, barely topping last year’s $278.5 million.
James B. Perry, the new executive vice chairman and CEO, said he was pleased with the company’s strategic improvements during a "time of continuing economic uncertainty."
He also noted that the company had had to close three gaming properties in Biloxi and Natchez, Mississippi, and Lake Charles, Louisiana, because of Hurricane Gustav over the Labor Day weekend, obviously affecting business for the next reporting period. However, he said that except for some flooding and minor damage, the properties escaped the impact that they felt during Hurricane Katrina.