|
Article Excerpt
Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good afternoon, ladies and gentlemen. Welcome to the Great Canadian Gaming reports second quarter results 2008 conference call.
I would now like to turn the meeting over to Mr. Thomas Bell, Vice President, Corporate Development and Investor Relations, of the Great Canadian Gaming Corporation. Please go ahead, Mr. Bell.
THOMAS BELL, VP CORPORATE DEVELOPMENT, INVESTOR RELATIONS, GREAT CANADIAN GAMING CORP: Thank you, Theresa and good afternoon, everyone. And welcome to Great Canadian Gaming Corporation's conference call to review the Company's financial results for the 2008 second quarter ended June 30th, 2008. Once again, I'm Thomas Bell, Vice President of Corporate Development and Investor Relations. With me on the call this afternoon are Milton Woensdregt, our Chief Financial Officer, and Vincent Trudel, our Chief Operating Officer. Following our prepared remarks, we will open up the call to questions-and-answer session for analysts and institutional investors.
Now before I begin, I must caution all participants that this conference call may contain forward-looking statements, which reflect Management's expectations regarding the Company's future growth, results of operations, performance, business prospects and opportunities. Whenever possible, such words as anticipate, believe, expect, intend, or similar expressions will be used to identify these forward-looking statements. These statements reflect Management's current beliefs and are based on information currently available to the Company. Forward-looking statements involve significant risk, uncertainties and assumptions. A number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and prospective investors should not place undue reliance on these forward-looking statements.
Although the forward-looking statements that may be made in this conference call are based on what Management believes to be reasonable assumptions, the Company cannot assure prospective purchasers of the Company's securities that actual results will be consistent with these forward-looking statements. These statements are made as of the date of this call and the Company assumes no obligation to update or revise them to reflect new events or circumstances. Milt will now provide a review of our financial performance this quarter, after which Vincent will add some operational commentary. Thank you. Milt?
MILTON WOENSDREGT, CFO, GREAT CANADIAN GAMING CORP: Thanks very much, Tom. Good afternoon, everyone, and welcome to our conference call. As you can see from our results, the markets in which Great Canadian operates remain relatively healthy. The Company has continued to benefit from this, posting year-over-year gains in both revenues and EBITDA during the second quarter of 2008. When compared to the second quarter of 2007, the Company recorded a 4% improvement in revenues, which rose to $101.6 million and a 3% improvement in EBITDA, which rose to $27.7 million.
We continue to experience revenue growth across our portfolio, most notably at our two largest properties, River Rock Casino Resort in Richmond and Boulevard Casino in Coquitlam. As a result of expanded entertainment and marketing efforts and upgrades to its hospitality offerings, River Rock revenues grew by 12% over the last year, the property's third consecutive quarter of double-digit revenue improvement. EBITDA, however, was flat from the second quarter of last year and EBITDA as a percentage of revenues decreased by 4.1 percentage points. We are nonetheless pleased with River Rock's results for the property saw significant increases in both table drop and slot coin-ins. Table drop increased by $16.6 million from the second quarter of 2007, despite a table hold percentage that was well below it's eight-quarter average, while slot coin-in increased by $20 million. This improvement in slot coin-in is especially impressive when one considers that River Rock is traditionally a more tables-oriented market.
Hospitality also continues to be a key driver for the property. The revenue per available room was $149 in the second quarter, up $22 from the year ago, while occupancy was 85%, up 7 percentage points from a year ago. Both these metrics are well ahead of our local competitors and we're pleased to see that the conference center we completed last year is making an impact on the property. River Rock's increased expenses during the quarter related mainly to expanded marketing and entertainment efforts, which we undertook to reaffirm River Rock's leading position in the metro Vancouver marketplace. As you know, the competitive landscape is changing and we want to ensure that River Rock maintains its status as British Columbia's premier gaming property. These marketing and entertainment programs, which will gradually return to normal levels over the course of the year were very well received and highlighted the unique entertainment experience that River Rock offers its guests.
At Boulevard, revenues and EBITDA rose 5% and 3% respectively when compared to the second quarter of last year. Slot coin-in at the property continued its impressive pace, growing by $38.4 million from the second quarter of last year. It's obviously been the major beneficiary of the Red Robinson Show Theater's continued popularity. Table drop also increased, growing by $1.4 million over last year. Like River Rock, this growth occurred despite an unusually low hold percentage. Boulevard is also witnessing encouraging visitation trends and also benefited from expanded marketing and entertainment efforts, although these were somewhat smaller in scale than those introduced at River Rock.
However, Boulevard again recorded a hold percentage well below its eight-quarter average and this prevented it from recording greater revenue and EBITDA gains. Despite these low hold percentages, we're encouraged by the impressive patronage and table drop at both facilities. We're very confident that River Rock and Boulevard will soon begin to generate returns that reflect their increased levels of play. It is also worth noting that both facilities combined to receive facility development commission revenues of $5 million during the quarter, a significant increase over the $2.9 million they received for the same period last year.
I'll turn now to Nova Scotia, where we're witnessing the initial progress of our recent restructuring. EBITDA at the two casinos there improved to $3.1 million when compared to the second quarter of last year, despite a slight decline in revenues. This improvement can be attributed to the operational changes we implemented during the quarter, which right-sized the Nova Scotia casino's offerings to a level more commensurate with market demand. This restructuring involved adjusting gaming capacity at both locations, reducing staffing levels, and fewer operating hours at the Halifax casino.
We'll now turn that ability to Fraser Downs and Hastings Race Course, our BC racinos, which have both recently introduced new gaming capacity and in Hastings' case will soon do so again. The new capacity did have an obvious impact on revenues for these properties. Despite the introduction of a smoking ban at Fraser Downs, gaming revenues at BC racinos increased by 43% when compared to last year and FDC revenues increased by 86% over the same period. However, EBITDA at these properties has not seen a commensurate increase and declined by 26% when compared to the second quarter of last year. This is due to the introduction of expenses, mainly staffing costs, associated with the new gaming capacity. We've spoken about ramp-up periods in the past and they're especially relevant for these properties, which are introducing new products to their markets. Fraser Downs has brought tables to Surrey and at the end of this week, Hastings...
|
