Red Rock Resorts posts 8% revenue growth in Q1, expects deal for A’s stadium to close in Q4

Red Rock Resorts has announced a revenue increase of 8% or $32 million in the first quarter of 2023, compared to the same period in 2022. Total net revenues for Q1 amounted to $433.6 million, but net income fell by 7.3% to $85.5 million amid a rise in spending.

The company’s Las Vegas operations generated net revenues of $430 million, with growth driven by higher revenues in all segments. The remaining $3.6 million was generated from corporate and other activities.

Adjusted EBITDA increased by 8.6% or $15.4 million, from $178.7 million to $194.2 million. The cash and cash equivalents of the company as of March 31, 2023, were $107.7 million, and the total principal amount of debt outstanding at the end of the first quarter was $3.1 billion.

“What we’ve really talked about the last few quarters is getting a better lay for our future growth pipeline and you’ve seen that we’ve acquired a few sites out where all the growth is off the beltway in the Las Vegas Valley,” Red Rock Resorts Chairman and CEO Frank Fertitta III said during Thursday’s conference call on the company financials.

In conversation with investors, the firm dodged specific questions about its recently-signed deal of a binding agreement to sell nearly 49 acres to the Oakland Athletics, amid the MLB’s relocation plans to Las Vegas. Executives said the agreement with the A’s is confidential, reports Las Vegas Review-Journal, but the firm expects the deal to close in the fourth quarter. The total amount of the transaction wasn’t revealed.

“We are big fans of organized sports in Las Vegas, we’re big fans of both the football team, the hockey team and, eventually, the baseball team as well,” Red Rock President Scott Kreeger said of the Oakland Athletics moving to Vegas. “It’s great for tourism, creating demand for the hotel rooms in the city,” Fertitta added.

The company also announced Thursday that the cost of its new Durango property in the southwest Las Vegas Valley has increased. Executive Vice President and Chief Financial Officer Stephen Cootey said construction costs increased from $750 million to $780 million as a result of expanding the building’s casino footprint and increasing construction labor and procurement costs.

Cash dividend declared

The company’s Board of Directors has declared a cash dividend of $0.25 per Class A common share for the second quarter of 2023. The dividend will be payable on June 30 to all stockholders of record as of the close of business on June 15.

The declaration of a cash dividend is seen as a positive sign for investors, as it indicates that the company is confident in its ability to generate profits and continue to provide returns to its shareholders.

The company also announced that prior to the payment of such dividend, Station Holdco would make a cash distribution to all unit holders of record, including the company, of $0.25 per unit for a total distribution of approximately $27.1 million.