The Cosmopolitan reported its second quarter earnings today.
Company: Nevada Property 1 LLC
Revenue: $199.6 million, down less than 1 percent from $200.1 million in net revenue during the second quarter of 2014.
Earnings: $15.3 million, compared with a net loss of $13.6 million in the same quarter last year.
What it means: This was the first profitable quarter for the resort, which was purchased by Blackstone last year for $1.73 billion.
While net revenue was virtually flat year over year, total operating expenses dropped by nearly 17 percent. Depreciation and amortization costs were significantly lower: $27.5 million in the second quarter this year versus $42.3 million last year. In a filing with the Securities and Exchange Commission, the resort said this decrease “reflected the revaluation of the fixed assets due to the sale.”
Casino revenue grew substantially year-over-year, but other departments performed about as well or worse than they did during the same period in 2014.
According to the securities filing, the Cosmopolitan’s casino revenue for the second quarter this year was $62.1 million, up 20.9 percent from last year. The filing cited double-digit percentage growth in table games and slots revenue.
“Our marketing efforts combined with main floor optimization has contributed to the increase in growth and higher volumes,” the filing said. “In addition, our Baccarat volume increased due to various tournaments offered during the quarter.”
Meanwhile, the Cosmopolitan’s $80.3 million in hotel revenue was down less than 1 percent compared to the same quarter last year. The hotel said that came from a slight decrease in occupancy.
Food and beverage revenue dropped 10.1 percent to $85.6 million. The Cosmopolitan’s filing said that increased competition drove a $3.1 million revenue decline from its Marquee nightclub, and changes to its Rose. Rabbit. Lie. space led to a $3 million revenue decrease there. Other factors included less banquet revenue, the closure of a third-party operated restaurant and “overall lower occupancy and fewer entertainment events.”
Entertainment, retail and other revenue was about $8 million, down 22.7 percent from last year. The decrease in that category was largely due to fewer entertainment events than last year, the filing said. The Cosmopolitan noted that it held 13 such events in the second quarter this year, compared to 24 in 2014.
Today’s securities filing also addressed the recent fire at one of the Cosmopolitan’s pools, which burned for about 30 minutes and didn’t seriously injure anyone. The resort said it’s “in the process of assessing the extent of the damage, which is not expected to be significant.” Damages should be covered by the Cosmopolitan’s insurance policies, according the filing.