Kerzner International Limited (KZL), formerly known as Sun International Hotels (SIH), showed a marked turnaround in its third fiscal quarter compared to last year when the company’s properties in the Bahamas were hard hit by the drop in tourism following the 9/11 attacks.
For the period ended on Sept. 30, the company reported net income of $2.2 million compared to a loss last year of $7.5 million.
However, the company’s Internet betting site, located on the Isle of Man, was a drag on earnings. In fact, when the company combined the losses of its Kerzner Interactive wagering, it recorded a loss of $0.4 million.
During the reporting period, the company received an option payment of $4.5 million from Station Casinos Inc. (STN) arising from the previously announced agreement to restructure the potential sale of 50% of Kerzner Interactive to Stations.
Boosting earnings for the period was a payment of $8.5 million from Trading Cove Associates, an entity 50%-owned by the company. Trading Cove Associates receives 5% of gross operating revenues of the Mohegan Sun operation.
Station Casinos Inc.
Station Casinos Inc. (STN) reported net revenues for the third quarter of $194.5 million, a 5% decrease from comparable levels last year. Still the company reported net income of $7.3 million or $0.12 a share, doubling the earnings of a year ago which were $3.4 million or $0.06 a share.
As for non-recurring items, the company said $1.4 million was the loss on early retirement of debt related to the revolving bank credit facility and $1.1 million of costs related to a patent litigation with Harrah’s Entertainment Inc. (HET).
Of particular interest to investors and gaming analysts was the explanation that the company had assisted the United Auburn Indian Community in placing land into trust for the development of a gaming and entertainment facility that Station has agreed to manage.
Construction on the new $365 million casino began on Oct. 26 and is expected to open in mid-2003.
Las Vegas Sands
Big numbers were reported by Las Vegas Sands, Inc., the owner and operator of The Venetian Casino Resort, for the third quarter of the current fiscal year.
Income from operations reached more than $43 million, more than doubling the $20.4 million reported during the third quarter of 2001.
The income was generated from revenues of $152.8 million, an increase of 24% over last year’s experience. Adjusted Property EBITDAR, a form of free cash flow measurement, for the nine-months ended on Sept. 30 was a record $156.7 million. This represented an increase of 28% when compared to the $122.4 million generated during last year’s first nine months.
As for the company’s new Phase 1A Project, the company said construction of a 1,000-room addition was currently on budget and on schedule for a June 2003 opening.
Also, the company said it was continuing its pre-development activities for a casino in Macau. “The residents of China,” said Bill Weidner, president and COO, “have rising disposable incomes, increased leisure time and a propensity to gamble. To meet this extraordinary opportunity, we are in the process of planning and designing a Las Vegas-style resort.”
Magna Entertainment Corp.
Magna Entertainment Corp. (MIEC), the Canadian-based operator of pari-mutuel racetracks in North America, reported a third quarter loss of $0.09 a share, a higher loss than the $0.07 a share reported a year ago.
Total racetracks revenues dipped by 0.3% to $58.3 million while non-wagering revenues declined by an unexpected 11.6%.
Cited as reasons for the decline were higher insurance and security costs, as well as marketing and startup costs related to its XpressBet account wagering operations which is expected to be a driving force of revenue in California where the company operates three major tracks.
During the quarter, the company said it had started Horseracing TV operations on a limited basis in conjunction with Las Vegas-based RTN (Roberts Television Network). The company plans to expand this operation by enhancing distribution of its racing product over satellite and cable facilities.
Other companies reporting included: Acres Gaming Incorporated (AGAM) which experienced net income of $0.05 a share compares to last year’s $0.04 a share; Mikohn Gaming Inc. (MIKN) which had a net loss of $2.35 a share compared to a net loss last year of $0.12 a share; Sands Regent (SNDS) reported net income of $0.27 a share, far higher than last year’s $010 a share, and PDS Gaming Corporation (PDSG) which reported income of $0.01 a share compared to the $0.16 a share reported a year ago.