Las Vegas-based casino and hospitality business Red Rock Resorts has announced financial results for the first quarter of the year. The Station Casinos parent company delivered net revenues of $401.6 million, an increase of 14% from $352.6 million in the same period of 2021, while it advances its Durango Casino & Resort project in the Las Vegas Valley and its cashless strategy.
Additionally, the business posted net income of $92.2 million, an increase of $198.8 million from a net loss of $106.6 million in the comparable period last year. Adjusted EBITDA was $178.7 million, up 14% from $156.6 million in Q1 2021. This marks the seventh quarter in a row that the company has achieved record same-store adjusted cash flow and adjusted cash flow margin.
Red Rock Resorts has locked in on a guaranteed maximum price for its $750 million casino project in southwest Las Vegas, company officials told investors. “The project is progressing nicely and is on schedule,” said Stephen Cootey, executive vice president, chief financial officer and treasurer of the company, according to Las Vegas Review-Journal.
Company officials broke ground on the project in March, which is expected to be completed after an 18-to-24-month construction period. The Durango venue, which has no non-restricted gaming competition within a 5-mile radius of the site, is set to feature 2,000 slot machines and 46 table games within a 73,000-square-foot casino.
Located in the fastest-growing neighborhood in Las Vegas, the property will also feature 200 hotel rooms and suites, four full-service food and beverage outlets and a food hall. Roughly 70% of construction expenses are built into the maximum guaranteed price contract.
During the first quarter, the company continued to operate its Red Rock, Green Valley Ranch, Santa Fe Station, Boulder Station, Palace Station and Sunset Station properties, together with its Wildfire Properties. Meanwhile, Texas Station, Fiesta Rancho and Fiesta Henderson remained closed.
Company officials gave no indication when these properties would reopen, and noted Red Rock Resorts continues to monitor market conditions before making a decision on a potential reopening for the venues, which implied $2.1 million in expenses for the business this quarter.
Almost all of the net revenue in Q1 corresponded to Las Vegas operations, at $399.7 million, an increase of 17% when compared to $342.8 million in the same period of 2021. Adjusted EBITDA from said operations was up by 21% to $194.6 million, from $160.7 million in the comparable quarter last year.
Breaking down operating revenues by segment shows most of it came from casino operations, at $279.7 million. Food and beverage provided $65.7 million in revenue, room delivered $36.8 million, while other revenues were at $19.2 million. Operating costs and expenses for the quarter were at $270.8 million.
“The combination of omicron and inflationary pressures offset by the lifting of the mask mandate across the state on Feb. 10 resulted in a quarter-over-quarter reduction in visitation,” Cootey said, according to Review-Journal. “But this trend was more than offset by increased time on device by our customers as well as strong spend-per-visit across our entire portfolio.”
Rendering for the Durango resort
While the omicron Covid-19 variant outbreak led to weak customer levels in January, they exceeded pre-pandemic figures in February and March. Additionally, customers are spending at higher levels, and the business is now opening a VIP high-limit table game room at Red Rock Resort.
The 9,000-square-foot gaming room will offer guests a new “elevated gaming experience,” offering players top-tier high limit games, double deck blackjack, shoe blackjack, baccarat, single zero roulette, and a dedicated cage, bar, and plush seating spaces for socializing.
“From the limits, games offered, and the impeccable service, we are looking forward to offering our guests, locals and visitors alike, an unparalleled high limit gaming experience,” said Scott Nelson, Vice President and General Manager of Red Rock Casino Resort & Spa.
Red Rock Resort's new high-limit room
The curved, 11-seat bar will also offer guests a selection of high-limit bar top games, alongside a bespoke hand-crafted cocktail experience. Starting Thursday, the High Limit Room will be open 24 hours a day for player access, reports KSNV.
An update was provided for the company’s cashless gaming endeavors, with a system rolled out to all properties except for Sunset Station and the Wildfire properties, with the rest expected to adopt it later this year. Customers have warmly received the new system thus far, according to Cootey.
The company’s cash and cash equivalents at March 31, 2022, were $336.6 million and total principal amount of debt outstanding at the end of the first quarter was $2.89 billion. The Board of Directors has declared a cash dividend of $0.25 per Class common share for Q2, payable on June 30, 2022 to all stockholders of record as of the close of business on June 16, 2022.