Citing strong performances in Ohio and Louisiana, real estate investment trust Gaming and Leisure Properties reported higher than expected first quarter 2017 earnings. The company declared a second quarter dividend of >Citing strong performances in Ohio and Louisiana, real estate investment trust Gaming and Leisure Properties reported higher than expected first quarter 2017 earnings. The company declared a second quarter dividend of $0.62 per share. Adjusted EBITDA was $219 million, net revenue was $243 million and adjusted funds from operations was $166 million, with net income at $94 million and earnings per diluted share at $0.45. All of the figures were 1-2.5 percent above previously issued company guidance.<.62 per share. Adjusted EBITDA was 9 million, net revenue was 3 million and adjusted funds from operations was 6 million, with net income at million and earnings per diluted share at >Citing strong performances in Ohio and Louisiana, real estate investment trust Gaming and Leisure Properties reported higher than expected first quarter 2017 earnings. The company declared a second quarter dividend of $0.62 per share. Adjusted EBITDA was $219 million, net revenue was $243 million and adjusted funds from operations was $166 million, with net income at $94 million and earnings per diluted share at $0.45. All of the figures were 1-2.5 percent above previously issued company guidance.<.45. All of the figures were 1-2.5 percent above previously issued company guidance.
GLPI Chief Executive Officer Peter M. Carlino said, “Our first quarter results exceeded expectations largely as the result of out-performance at our managed property, Hollywood Casino Baton Rouge, which grew net revenue by 9 percent over the prior year, and at the PENN operated Hollywood Casino Toledo and Hollywood Casino Columbus properties. These property level results are indicative of the healthy regional gaming markets in which the company and our tenants operate. We expect to continue to generate secure and predictable cash flow for our investors, while we pursue strategic acquisitions that achieve our goals of stability, diversification and accretion.”
GLPI previously announced its intention to acquire the underlying real estate assets of Bally’s Casino Tunica and Resorts Casino Tunica for $82.6 million. Following the close of the transaction, expected on May 1, the REIT said it would lease those properties to Penn National Gaming. Carlino said, “We are excited to partner with Penn National Gaming, Inc. on this transaction as these assets will be added to the existing PENN master lease and will produce $9 million of incremental annual rent. We appreciate the expedient review completed by the Mississippi Gaming Commission, which approved the transaction on April 20, 2017. This acquisition demonstrates our steadfast focus on accretive growth for our shareholders.”
Carlino added he did not consider Tunica and Mississippi to be saturated markets, like many observers, but saw the deal as adding value. “We do pride ourselves in bringing a unique underwriting ability to gaming assets so we can look objectively and carefully at a market like Tunica,” he said.
Steifel analyst Steven M. Wieczynski commented, “GLPI’s results continue to reflect the consistency and predictability associated with the triple-net model. All told, though we are believers in the dedicated gaming REIT concept as stewarded by GLPI’s capable management team over the longer term, we believe incremental acquisition activity of size could be limited in the near term.” However, Carlino stated GLPI will continue to aggressively seek new acquisition opportunities as a means to increasing shareholders’ dividends. “There’s a handful of properties around the country we remain focused on. I think we’ve stepped up the pace at which we’re looking at other opportunities,” he said.
GLPI issued second quarter guidance of $244 million in revenue, $96 million in net income, $167 million in AFFO and adjusted EBITDA of $221 million.
Including the Bally’s deal, GLPI will have acquired the real estate assets of 17 casinos in eight states, generating rental income of $411 million. Currently the company owns more than 4,300 acres of land and 15 million square feet of building space, all fully occupied. As of March 31, GLPI owned the real estate underlying 36 casinos, half of which are leased to Penn National.
