Red Rock Revenue Boosted by Long-Term Growth Strategy
LISTEN TO THIS ARTICLE:Red Rock Resorts has announced a modest yet important 3.6% increase in revenue, reaching $1.72 billion in 2023, which is claims is a testament to the effectiveness of its long-term growth strategy.
The company’s strategic initiatives have included the acquisition and opening of new properties throughout the year. The Durango in Nevada opened its doors in December, alongside the Wildfire Fremont in downtown Las Vegas, which began operations in February.
Furthermore, Red Rock has continued to invest in improving its existing properties, such as Palace Station in Nevada. While these improvements are not free of charge, the company claims that they are part of its long-term growth strategy.
In addition to showing strong financial results, 2023 was a year in which we continued to validate our long-term growth strategy across the Las Vegas Valley. The successful openings of the Durango and Wildfire Fremont properties not only validate our long-term growth strategy within the Las Vegas Valley but also demonstrate the power of our own development pipeline and real estate bank. Not only do we expand our physical footprint across the Valley in 2023, but we continue to execute our core strategy of reinvesting in our existing properties to deliver fresh and relevant amenities to our guests.
Expenses Up and Profits Down
Despite the revenue increase, Red Rock faced challenges such as higher operating expenses and interest costs, which resulted in a 12.4% decrease in pre-tax profit and a 14.4% reduction in net profit compared to 2022. However, the company saw a small 0.3% increase in adjusted EBITDA, indicating a resilient operational performance amidst these challenges.
Speaking about the year ahead, Cootey said that while there are reasons to be confident, there will also be challenges, such as disruptions at Palace Station due to work being carried out on the property.
The fourth quarter of 2023 mirrored the annual trends, with both revenue and adjusted EBITDA experiencing growth, yet net profit declined.
Revenue in Q4 grew 8.7% to $462.7 million. However, operating expenses were 42.6% higher at $290.8 million and interest costs came to $48.7 million. Profit before tax was $124 million, a drop of 31.9% compared to 2022 and overall, there was net profit of $56.3 million, a fall of 38.7%. However, adjusted EBITDA was up 3.6% at $201.3 million.
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