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By Beth Jinks
(Bloomberg) - Caesars Entertainment Corp., the world’s biggest casino company, reported a fourth-quarter loss after cost cuts and the acquisition of a Las Vegas casino failed to offset declines in Atlantic City, New Jersey.
The net loss of $196.7 million compares with a profit of $295.6 million a year earlier, when earnings were boosted by a gain from extinguishing debt early, the Las Vegas-based company, formerly called Harrah’s, said today in a statement. Sales rose 1 percent to $2.12 billion.
Las Vegas casinos are beginning to recover following record declines since Caesars was taken private in a January 2008 buyout. Caesars canceled a planned initial public offering last year, after Chairman and Chief Executive Officer Gary Loveman reduced costs, slashed debt and extended maturities in a series of balance sheet restructurings.
Gains from the addition of Planet Hollywood, bought a year ago, were “offset by the continuing impact of the weak economy on customers’ discretionary spending ” Caesars said in the statement. “However, certain markets, including Las Vegas, have shown signs of stabilization and improving operating margins.”
Cash flow, measured as adjusted earnings before interest, taxes, depreciation and amortization, increased 5.1 percent to $439.9 million in the quarter.
Las Vegas cash flow gained 5.2 percent to $183.7 million, boosted by the addition of Planet Hollywood. In Atlantic City, where Harrah’s owns four casinos, Ebitda tumbled 51 percent to $32.9 million.
Caesars canceled its IPO in November, citing “market conditions.” The IPO aimed to raise more than $500 million for expansion, including finishing the Octavius Tower at Caesars Las Vegas, and developing the LINQ retail and entertainment area next to the Flamingo. The company yesterday priced a $400 million loan to fund the projects.
Leon Black’s Apollo Management LP and David Bonderman’s TPG Inc. took Las Vegas-based Caesars private for $30.7 billion, including debt and transaction costs.
Caesars will invest in and run two casinos in Cleveland and Cincinnati, Ohio, being developed by Dan Gilbert, the founder and chairman of Quicken Loans Inc., the venture, Rock Ohio Caesars LLC said in December.
Caesars bought the Planet Hollywood Resort & Casino from default a year ago, gaining a Las Vegas Strip property next to its other resorts for less than it would cost to build.
