Casino operator Affinity Gaming reported a slight uptick in operating income in the third quarter of 2016 as a result of refocused promotional campaigns and marketing programs.
In a regulatory filing on Monday, the Las Vegas-based casino operator reported its strongest quarter of the year for property level adjusted cash flow, with its operating income for the July to September period up by 0.7 percent to $9.1 million, compared to the $9.04 million of the same period.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of Affinity, on the other hand, rose by 6.4 percent to $17.71 million in the third quarter, ahead of 2015’s third quarter EBITDA of $16.64 million.
Michael Silberling, Chief Executive Officer of Affinity, pointed out that the continued growth in adjusted EBITDA allows them to generate gains in free cash.
“Over the last two years, we have successfully executed our strategic plan targeted at significantly improving margins and returns from the Company’s operating assets. This has been accomplished by rebuilding our executive team with new leadership across most operating departments, executing against a new set of operating principles, simplifying our capital structure, and lowering the cost of capital and de-levering the business,” Silberling said in a statement.
Affinity, owner of the Silver Sevens property in Las Vegas and three hotel-casinos in Primm, however, saw its net revenue drop by 5.4 percent to $96.4 million from the same period in 2015. Its gross revenue also slumped by 8.7 percent to $9.9 million because of the company’s on-going focus on marketing to more profitable players.
For the nine months ended September 30, 2016, Affinity’s net revenue was down 4.5 percent to $286.8 million, unlike in the same period of 2015, when it posted a $300.4 million net revenue. Gross revenue for the first nine months of 2016 decreased $25.8 million, or 7.6 percent, year over year, due to reduced casino revenue.
Meanwhile, Silberling reported the modernization, renovation, and enhancement of Buffalo Bill’s and the Primm Valley Resort in addition to Whiskey Pete’s remain a priority. In addition to upgrading the food and beverage product, the company has repaved roads and parking lots in the area.
“The customer response and feedback to initial upgrades have been measurably positive on all fronts,” he said. “With the strong consumer response to the Phase One upgrades and continued Phase Two improvements in 2017, combined with our new business partner efforts at the Primm Valley Shopping Mall, we believe that the overall product will appeal to a broader audience.”