Red Rock’s revenue growth in 2023 is a reflection of its comprehensive strategy in the finance industry. The company has been focused on acquiring and opening new properties, with several scheduled to launch in 2023. Among the recent additions to the Red Rock portfolio is the Durango, which opened in Nevada in December. Another significant addition is the Wildfire Fremont in downtown Las Vegas, which launched in February.
In addition to expanding through new properties, Red Rock is committed to enhancing its existing properties, including Palace Station in Nevada. Although these improvements come with costs that impact the bottom line, Red Rock believes they are crucial for long-term growth.
Red Rock’s Chief Financial Officer, Stephen Cootey, expressed confidence in the company’s long-term growth strategy, highlighting the successful openings of the Durango and Wildfire Fremont properties as evidence. Cootey also emphasized the importance of their development pipeline and real estate bank in achieving their goals.
Looking ahead to 2024, Cootey cautioned about challenging year-over-year comparisons and ongoing disruptions at Palace Station due to ongoing work. Despite these challenges, Red Rock remains optimistic about its prospects.
In terms of financial performance in 2023, casino activity was the primary source of revenue for Red Rock, totaling $1.13 billion, representing a 0.5% increase. Food and beverage revenue saw a significant growth of 10.8% to reach $313.6 million, while room revenue increased by 11.3% to $183.1 million. Other revenue also experienced growth, rising by 8.4% to $94.4 million. Additionally, management fees contributed an additional $807,000 to the revenue.
In contrast, total operating expenses rose by 5.7% to $1.17 billion, with selling, general, and administrative activities accounting for $374.5 million, and casino costs amounting to $294 million. Despite these expenses, adjusted EBITDA increased slightly by 0.3% to reach $746 million.
However, there was a decline in net profit. Pre-tax profit for the year was $380.8 million, representing a 12.4% decrease compared to the previous year. After tax payments of $43 million and the inclusion of income from non-controlling interests, the net profit amounted to $176 million, reflecting a 14.4% decrease from 2022.
Similar trends were observed in the final quarter of 2023, with revenue and adjusted EBITDA showing year-on-year growth, while net profit declined. In Q4, revenue reached $462.7 million, an 8.7% increase compared to the same period last year. Casino revenue accounted for $301.7 million, followed by food and beverage revenue at $85.1 million, and room revenue at $52.2 million. Further revenue came from other sources amounting to $23.5 million and management fees of $205,000.
However, operating expenses in Q4 rose significantly by 42.6% to $290.8 million. Interest costs stood at $48.7 million, while earnings from joint ventures were $802,000. Pre-tax profit for Q4 was $124 million, reflecting a 31.9% decrease from the previous year. After tax payments of $15.1 million and income from non-controlling interests, the net profit amounted to $56.3 million, representing a decline of 38.7%. Nevertheless, adjusted EBITDA for the quarter showed a modest increase of 3.6% to reach $201.3 million.
