Century Casinos (CNTY) Q2 2022 Earnings Call Transcript

Century Casinos (CNTY -4.17%)
Q2 2022 Earnings Call
Aug 05, 2022, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to Century Casinos Q2 2022 earnings conference call. This call will be recorded. [Operator instructions] I would now like to introduce our host for today's call. Mr.

Peter Hoetzinger. Mr. Hoetzinger, you may begin.

[Operator instructions] Our first question is from Jeffrey Stantial with Stifel. Please go ahead. Your line is now open.

Jeffrey Stantial -- Stifel Financial Corp. -- Analyst

Hey, good morning, everyone and congrats. Nice set of results here. Starting off, I was just hoping to drill in a bit more into the month-by-month cadence of the quarter. Any notable sequential changes in either direction as you progressed through April through June, either on the top line or with respect to margins? And any color into July would be helpful as well, breaking out U.S.

versus Canada versus Poland?

Peter Hoetzinger -- Vice Chairman, President, and Co-Chief Executive Officer

Erwin, do you have any data on that, how the quarter progressed? Erwin?

Jeffrey Stantial -- Stifel Financial Corp. -- Analyst

High-level qualitative is fine if you don't have the numbers on it.

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

I have all the numbers, but the question is how much shall I through all of them. Why don't they group them by state to begin with? And if you would like to know more, then we'd go in today into property by property, if that's fine for you.

Jeffrey Stantial -- Stifel Financial Corp. -- Analyst

By region is fine. And then, just -- I was more wondering qualitatively, the consumer feel like it picked up, did it drop off? Did cost pressures get better, get worse, just more kind of qualitatively how things progressed through the quarter, if that makes sense.

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

Yeah, sure, sure. So in Colorado in April, we made $4.1 million in net operating revenue; May $3.8 million; June $3.7 billion and in July, north of $4 million. In Missouri, we went from $10.4 million, and that's all the second quarter of 2022. From $10.4 million in April, $9.6 million in May, and $9 million in June and again in July, north of $9 million, significant not of much.

In West Virginia, $9.9 million, $10.5 million, $9.3 million and in July, around $11 million. And then, moving on to Canada. In Canada, we made $6.6 million, $6.3 million, $6.2 million , with July being around $6.4 million. And in Poland, we went from $7.1 million in April to $8 million in May, $6.6 million in June and more than $7 million in July.

That is for net operating revenue. Is that good enough for you so far?

Jeffrey Stantial -- Stifel Financial Corp. -- Analyst

Yeah. Yeah. We can leave it there on -- kind of on the top line, really encouraging trends into July specifically. Moving on to my follow-up, I wanted to drill into your comments at the end on potentially staying nimble on your two projects, the boat to new land at Caruthersville and the hotel at Cape Girardeau.

Could you just talk about kind of where are the pressure points right now from a supply chain perspective? Is it labor? Is it certain raw materials, kind of what's -- what are the different pressure points at the moment? And kind of once you do you get started, what are some of the things you're exploring to help, call it, hedge further inflationary pressures to the extent things change just over the course of the projects.

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

Right. The pressure point clearly is the material, both the availability and the price, the two of them may maybe one, but not necessarily something is not availability. It's not availability, it's notably by a high price. And -- but we think that we may have seen the peak of supply chain challenges with regard to price already, and then we see the prices come down already.

So we're really going, so to speak, from week to week and making an assessment and just look at the time when it's the right time to start. Labor is not the problem. Our suppliers would all be ready to go, but the high cost pressure of the material is where we think it's better waiting a little bit and going on a week-to-week assessment is a more intelligent approach here.

Jeffrey Stantial -- Stifel Financial Corp. -- Analyst

Perfect. That's very helpful. And then, if I could just squeeze in one more on the M&A environment at present. Does it feel like there's -- there's appetite from sellers in the U.S.

And if you go back to early COVID, clearly, there was a number of assets that that came on sale to direct consequence of some of the pressures going on in the market. Would you say that collapse that we've seen in the public market year-to-date has flowed through at all of the M&A markets, whether in terms of expectations or the number of sellers at the table? Or do things feel fairly stable?

Peter Hoetzinger -- Vice Chairman, President, and Co-Chief Executive Officer

It's fairly stable. I mean, all the regional operators do see the same thing, namely that the customer trends are still holding up very, very nicely. So there are no fire sales out there. Margin -- sorry, multiples also has not come down significantly because the underlying trends are very solid.

So it's a pretty stable environment. There's not too much out there. It's a bit quieter compared to two, three years ago. But we do see two or three very interesting properties out there for us.

Jeffrey Stantial -- Stifel Financial Corp. -- Analyst

Perfect. Helpful. Thank you, both.

Questions & Answers:

Operator

Thank you. Next question is from the line of Edward Engel with ROTH Capital. Please go ahead. Your line is open.

Edward Engel -- ROTH Capital Partners -- Analyst

Hi. Thank you for taking my question. You mentioned that Canada hasn't completely normalized as quickly as some of your other markets did. I guess, what kind of time line are you expecting for that to get to full strength? Could it happen as early as the fall when maybe people get back from vacation? Or would you kind of expect a slow progression?

Peter Hoetzinger -- Vice Chairman, President, and Co-Chief Executive Officer

Sorry, Erwin, go ahead.

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

No, no, no. OK -- shall I. From -- yes, it's difficult to project Peter absolutely agree. But our assessment of the situation is that we think there's a very high chance that these markets come back in Q3 and then the latest Q4.

Peter Hoetzinger -- Vice Chairman, President, and Co-Chief Executive Officer

Yeah, I wanted to add that typically in the summer months, people in Alberta either tend to go on vacation, will stay outdoors as long as they can because the weather is nice. Then getting into from September onwards or October onwards, so then it is, so to say, high season is for indoor entertainment activities.

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

And if I may answer that it may be possible that the development of the oil prices, as you know, Alberta is oil country that this may generally have a positive effect on the Alberta economy.

Edward Engel -- ROTH Capital Partners -- Analyst

Helpful. And then, on your reporting, I noticed the corporate expense was down a good chunk during the quarter. Just to confirm, are you netting your share of rental equity income in that line item?

Peter Hoetzinger -- Vice Chairman, President, and Co-Chief Executive Officer

Yes, Peggy, right?

Peggy Stapleton -- Chief Financial Officer

Yes, we are. It's an equity investment.

Edward Engel -- ROTH Capital Partners -- Analyst

And that's just your share of the income. It wouldn't be the cash -- the cash proceed?

Peggy Stapleton -- Chief Financial Officer

That's right. There's the difference between the cash.

Edward Engel -- ROTH Capital Partners -- Analyst

Perfect. OK. Thank you.

Operator

Our next question is from the line of Jordan Bender with JMP Securities. Please go ahead. Your line is open.

Jordan Bender -- JMP Securities -- Analyst

Good morning. Thanks for taking my question. I was wondering if you're seeing any impact at your, I guess, Missouri Properties from the new expansion down in Arkansas?

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

We think that we see a little bit of an impact with the customers that are in the overlapping catchment area for both casinos.

Jordan Bender -- JMP Securities -- Analyst

OK. And then, it looks like your license for the Hilton in Warsaw comes out next month. Is there any update on the relicensing bid for that casino?

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

Not yet, but we expect to hear pretty soon.

Jordan Bender -- JMP Securities -- Analyst

OK. And then, sneak one more in here. FX in the quarter seems to have maybe impacted financial. Is there anything to call out in either Canada or Poland just based off the FX moves.

Peter Hoetzinger -- Vice Chairman, President, and Co-Chief Executive Officer

Peggy, can you comment on that?

Peggy Stapleton -- Chief Financial Officer

No, I don't think there's anything to call out at this point.

Jordan Bender -- JMP Securities -- Analyst

OK. Thank you.

Operator

Thank you. Next question is from the line of Chad Beynon with Macquarie. Please go ahead. Your line is open.

Aaron Lee -- Macquarie -- Analyst

Hi. This is Aaron on for Chad. Thanks for taking my question. I wanted to touch on the return of the older demographic.

Last quarter, you talked about how they were coming back. Did that trend continue? And how close is that demographic to getting back to the prepandemic levels?

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

To answer that all across the board, it's pretty -- a, it continues, and b, it's pretty much back to normal in some areas, even like 1%, 2% buffer for the growth.

Aaron Lee -- Macquarie -- Analyst

OK. Got it. In your prepared remarks, you also noted that you were able to maintain margins despite facing higher costs and a little it looks like volumes remained strong heading into 3Q. So is it fair to think that margins can be maintained at this 27% range?

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

It would be our assessment.

Aaron Lee -- Macquarie -- Analyst

OK, thanks.

Operator

Thank you. Our next question is from the line of  Kenneth [Inaudible]. It is a private investor. Please go ahead.

Unknown speaker

Good morning, guys. I've been watching your company for, I guess, seven or eight years, and I see it's growing steadily, and I see your book value is going back up. And the price of the stock is really -- does not reflect as much and, I think, it should be worth. However, I do have one observation, and I'd like to ask you what you're doing about it.

I noticed that on corporate and other, you consistently show some sort of loss. Can you define what corporate and other is and where those losses come from? Because they were really -- if they weren't there, they would really bump up your earnings quite a bit. Is there something you can do about that? Can you explain what that is?

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

Peggy, please?

Peggy Stapleton -- Chief Financial Officer

Kenneth, so corporate and other doesn't really have revenue streams flowing into it for the most part. It's a corporate overhead expense. You have to have accounting, you have to have human resources, compliance, executive management. And we do run an extremely lean organization at the top.

So there's not a whole lot that flows through there. You do see interest expense coming out of there as well for our large Macquarie loan.

Peter Hoetzinger -- Vice Chairman, President, and Co-Chief Executive Officer

And Peggy, does it also include all the costs for the -- like the stock exchange reporting and audit does it everything?

Peggy Stapleton -- Chief Financial Officer

Auditors, stock exchange, all of those expenses.

Unknown speaker

I see. Does the running of the ship casinos come from that zone too?

Peggy Stapleton -- Chief Financial Officer

It is, but that's a very immaterial number. We're down to just one casino on a ship.

Unknown speaker

OK. So I would expect that that one there is heading would be kind of the -- what's a good word for it. It's the dustbin of necessary expenses that go in there. It's just one of those things that you have your accounting, I suppose, right?

Peggy Stapleton -- Chief Financial Officer

That's correct.

Unknown speaker

OK. I was happy to see your company doing better and I'll still be holding your stock. So thank you very much.

Peggy Stapleton -- Chief Financial Officer

Thank you.

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

Thank you.

Peter Hoetzinger -- Vice Chairman, President, and Co-Chief Executive Officer

Thank you, Kenneth.

Operator

Thank you. And there are no further questions at this moment. I'll turn it back to Mr. Hoetzinger for any closing remarks.

Peter Hoetzinger -- Vice Chairman, President, and Co-Chief Executive Officer

Thank you, everyone, for joining our call today. For a recording of the call, please visit the Financial Results section of our website at cnty.com. And if you have any follow-up questions, please feel free to reach out to us. Stay well, and goodbye.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Jeffrey Stantial -- Stifel Financial Corp. -- Analyst

Peter Hoetzinger -- Vice Chairman, President, and Co-Chief Executive Officer

Erwin Haitzmann -- Co-Chief Executive Officer and Chairman

Edward Engel -- ROTH Capital Partners -- Analyst

Peggy Stapleton -- Chief Financial Officer

Jordan Bender -- JMP Securities -- Analyst

Aaron Lee -- Macquarie -- Analyst

Unknown speaker

More CNTY analysis

All earnings call transcripts