Reno-based Monarch Casino & Resort has tabled its planned expansion of the Monarch Casino in Black Hawk, Colorado. The delay was attributed to weaker profits in the third quarter. Monarch acquired the former Riviera Black Hawk in 2012.
In an October 31 statement, Monarch, which also operates the Reno-based Atlantis, posted net income of $9.3 million, or 50 cents per diluted share, for the three months that ended September 30, down from $10.9 million, or 58 cents per diluted share, during the same period in 2018.
Adjusted EBITDA was down 5.4 percent to $17.4 million from $18.4 million. Revenues were up 1.9 percent to $65.6 million from $64.4 million but missed the $68.5 million forecast of Zacks-polled analysts, who expected Monarch to earn 58 cents per share, according to CDC Gaming Reports.
Monarch had expected its $400 million-plus Black Hawk expansion, with a 23-story, 500-room hotel tower, to open this year. In a first-quarter earnings call in February, CEO John Farahi said his company’s contractor, Edmonton, Alberta-based PCL Construction, would have the casino, hotel, shops and restaurants done by the third quarter and complete other work in the fourth quarter. But now, Monarch says the new tower will open in 2020’s first quarter and renovations on existing casino space to finish by 2020’s second quarter. That timeline proved unrealistic when PCL found drilling in the granite bedrock difficult. The two parties are now in court over the missed deadline and cost issues.
Monarch said it spent $396 million of a budgeted $430 million to $442 million for the overall renovation, including the new hotel tower.
Monarch warned a litany of factors could further hamper the Black Hawk project including construction delays or disruptions, increased labor and materials costs, contractor disagreements, labor and materials availability, zoning and building permit issues and environmental restrictions.
Monarch also warned that laws mandating minimum wage increases and permitting expanded gambling in its markets could hurt the company’s ability to optimize profits and boost operating results.
Monarch Casino shares have risen 12.4 percent in 2019.
