Great Canadian Gaming Corporation released its second-quarter earnings report posting C$70.7 million ($56.6 million) in revenues for the three months ended June 30, 2021.
Decrease in Expenses Led to Higher Revenue and EBITDA
Q2 2021 revenue is up 13% on the C$62.8 million ($50.2 million) in the respective quarter in 2020, mainly due to the re-opening of the Atlantic properties for a portion of the quarter, albeit operating under certain restrictions.
Second-quarter revenues consisted of annual entitlement of service provider fees for permitted capital expenditures and service provider fixed fees. For the six months ended June 30, 2021, Great Canadian generated C$123 million ($98.4 million), 63% down from the C$336.6 million ($269.3 million) accounted in Q2 2020.
A decrease in expenses related to property, marketing, and administration in Ontario, paired with the re-opening of the Atlantic properties, resulted in a 31% increase in adjusted EBITDA, from C$31.8 million ($25.4 million) in the second quarter of 2020 to C$41.8 million ($33.4 million) in Q2 2021.
Decreased capital expenditures due to the timing of the company’s development projects in Ontario, as well as settlement payments for payables prior to the business interruption period, led to a decrease in negative free cash flow to C$22.8 million ($18.2 million), from C$123.4 million ($98.7 million) in Q2 2020.
Cash outflow significantly decreased in Q2 2021 to C$0.3 million ($0.24 million), coming down from C$383.7 million ($307 million) in Q2 2020, primarily due to no debt repayments, less capital expenditure, and capital expenditure remuneration receipt pushed forward from the third quarter.
Net loss for the reported quarter decreased by 26%, from C$36.4 million ($29.1 million) in Q2 2020 to C$27 million ($21.6 million) now, due to the higher adjusted EBITDA in Ontario and Atlantic, and lower share-based compensations.
Acquisition Arrangement Moving Forward
The end of the second quarter saw Raptor Acquisition Corp (RAC) being granted approval under the Investment Canada Act and the Canadian Pari-Mutuel Agency to continue with the acquisition of Great Canadian Gaming Corp after shareholders at the casino company approved the bid from the Apollo Global Management affiliate later last year for the transaction that is expected to close in Q3 2021.
By the end of the second quarter, RAC closed a private offering of $350 million of senior secured notes priced at 4.875% and with maturity in 2026, the proceeds of which were placed and would be held in escrow until certain conditions related to the arrangement with Great Canadian for the acquisition are satisfied.
Speaking about the future outlook of the company, Great Canadian interim CEO Terrance Doyle said that, “as at June 30, 2021, Great Canadian continues to remain in stable capital and liquidity position with a cash balance of $437.2 million and $912.6 million of available undrawn credit on its credit facilities, subject to applicable covenants.”
Great Canadian said it would not be hosting a conference call for investors and analysts due to limited operations and pending arrangements with Apollo Global Management.