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GCGC Announces First-Quarter Results

Published: May 11, 2012 11:22 am ET

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On Wednesday, May 9, the Great Canadian Gaming Corp., owner operator of Flamboro Downs, Georgian Downs and Fraser Downs, announced an opening-quarter net loss of $31.9-million in spite of a 12 per cent rise in revenue ($102.8 milion).

The company announced that the loss is in relation to a $57.4-million impairment charge on two of its properties (Flamboro and Georgian) stemming from the Ontario Lottery and Gaming Corp.'s decision to terminate the province's slots-at-racetracks agreement.

"In March of 2012, the provincial government in Ontario directed the OLG to end the 'Slots at Racetracks' program in that province," GCGC President and CEO Rod N. Baker said via release. "As a result, on March 29, 2012, the OLG provided notice that the site holder agreements for the slot machines at our two Ontario racetracks will terminate on March 31, 2013. Together, these two properties generated approximately 10 per cent of Great Canadian's consolidated EBITDA during the first quarter of 2012, and approximately 13 per cent during the 12 months of 2011. As the future cash flows associated with Georgian Downs and Flamboro Downs are uncertain, the company recognized goodwill and long-lived asset impairments associated with these businesses during the quarter, as required under IFRS. We remain in discussions with the OLG regarding both our existing Ontario operations and the potential for new opportunities that may arise from the province's efforts to modernize its gaming offerings."

The release also quoted Baker as saying, "Great Canadian is financially prepared for any new opportunities that may arise in Ontario or elsewhere. The company's secure financial position, evident in both our cash balance and undrawn $350 million revolving credit facility, provide us with the flexibility to take advantage of these and other potential opportunities for value creation."

To view GCGC's release regarding its first-quarter results, click here.

(With files from GCGC)


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