On Monday, March 9, Great Canadian Gaming Corporation announced its financial results for the three-month period (the fourth quarter of 2009) and 12-month period (2009) ended December 31, 2009
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For both the fourth quarter and 12 months of 2009, Great Canadian Gaming implemented improvements in operating efficiency to withstand a challenging economic environment.
Revenues for the fourth quarter of 2009 were $96.3 million, a $0.4 million decrease from the fourth quarter of 2008. Revenue declines were most pronounced at Boulevard Casino, the Nova Scotia Casinos, and the Great American Casinos, primarily due to the weakened economy. These declines were offset by a $2.6 million revenue increase at River Rock Casino Resort. This increase can be attributed to the comparable period at River Rock, which was impacted by weather and other factors, as well as that facility's recently completed redevelopments, which have improved both its visitation and gaming volumes.
Revenues for 2009 were $382.2 million, a 5% decline from 2008. This decrease was primarily due to the weakened economy, which impacted nearly all of Great Canadian's facilities. Declines were most pronounced at Boulevard, the Nova Scotia Casinos, and River Rock, which was also impacted by disruption from construction until November 19, 2009.
EBITDA for the fourth quarter of 2009 was $33.0 million, a 40% increase from the fourth quarter of 2008. EBITDA for 2009 was $126.6 million, an 18% increase from 2008. EBITDA as a percentage of revenues for 2009 was 33.1%, a 6.4 percentage point increase from 2008.
These EBITDA and efficiency improvements reflect the benefit of the comprehensive expense reduction initiatives the Company initiated during the fourth quarter of 2008. These initiatives reduced operating expenses by $40.4 million for 2009, when compared to 2008.
Great Canadian also completed a major redevelopment project at River Rock during the fourth quarter of 2009. This project, which opened on November 19 and had a total cost of $34.0 million, included a renovation of River Rock's atrium, upgrades to its amenities, and an elevated walkway that connects the facility to the Canada Line's Bridgeport Station.
"2009 was, as expected, a difficult year," stated Ross J. McLeod, Great Canadian Chairman and Chief Executive Officer. "The revenue decline we witnessed over the past 12 months presented a new challenge for our company. In response, we adopted a proactive strategy of both cost and capital management. This strategy was designed not only to combat declining revenues, but also to ensure that Great Canadian emerged from 2009 stronger, more efficient, and in a better position to create stakeholder value. Our results today serve as confirmation that we delivered upon these goals.
"The economic recovery of our markets will take time. But we cannot rely on external factors to improve our business, and must proactively explore opportunities for revenue growth. Our redevelopments at River Rock, View Royal, and Georgian Downs have provided varying levels of improvement to those facilities, and we have recently completed upgrades to the gaming products we offer in both British Columbia and Nova Scotia. These enhancements have further established the quality of our property portfolio, and will assist us over the year ahead, when we will pursue greater operational efficiency, superior customer service, and a reversal of 2009's revenue trend.
"In some cases, increased marketing efforts will be necessary to achieve these tasks. However, we anticipate that a substantial majority of the expense reductions we implemented during 2009 will be sustainable. These reductions will facilitate further improvements in our financial performance, as any revenues we recapture will translate more efficiently to our bottom line."
Mr. McLeod concluded, "With our redevelopment projects now complete, Great Canadian finds itself in a robust financial position. We attained this position by being conservative, and we will continue to adhere to this philosophy as we analyze options for our future. It is vital that we remain cautious about our markets' economic outlook. But we have made many improvements over the past twelve months, and I am confident that these will facilitate the creation of greater stakeholder value during the year ahead."
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