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Vici Properties revenue up 20.4% in M&A-heavy Q3

| By Marese O'Hagan
Revenue at Vici Properties grew 20.4% year-on-year during a third quarter that was marked by M&A progress.

During the period ended 30 September, Vici completed its CA$221.7m (£130.1m/€151.7m/US$162.6m) acquisition of four casinos in Alberta, Canada from Century Casinos. The acquisition – which was announced in May – saw Vici take over  Century Casino & Hotel Edmonton, Century Casino St Albert, Century Mile Racetrack and Casino and Century Downs.

Vici also completed its US$203.0m acquisition of Rocky Gap Casino Resort during the three months, in conjunction with Century.

Revenue for the quarter was $904.3m, a positive development from the $751.4m posted in Q3 2022. This marks steady year-on-year improvement for the third quarter of the year.

Edward Pitoniak, CEO of Vici said the quarter reflected Vici’s most important strategic plans, centring on M&A and steady growth.

“Vici’s third quarter financial performance reflects our sustained, sustainable commitment to accretive growth and capital deployment through acquisitions and strategic financing activity, exemplified by approximately 20% revenue growth and nearly 11% growth in AFFO per share year-over-year,” said Pitoniak.

Adjusted funds from operations (AFFO) attributed to common stockholders was $547.6m, up by 16.3% yearly.

Improvements across the board in Q3

Vici’s largest source of income was from sales-type leases, at $500.2m. Caesars’ regional master lease and Joliet lease made the highest contribution here, at $132.9m. Caesars’ Las Vegas master lease accounted for $113.6m, followed by The Venetian Resort Las Vegas’ lease at $64.3m.

Income from lease financing receivables, loans and securities was $378.5m, while other income was $18.1m. Golf revenues accounted for $7.4m of the total amount.

Operating expenses dropped significant in Q3. They totalled at $139.5m, down by 48.4%. The largest source of expense was change in allowance for credit losses, which generated costs of $95.9m. Other expenses were $18.1m, while general and administrative expenses were $14.4m.

Further interest-related costs – such as interest expense at $204.9m – brought the income before income taxes to $566.1m. After factoring in income tax expense, the net income was $565.4m for the quarter, up by 67.8% yearly.

Adjusted EBITDA for the quarter was $726.4m, up by 13.7%.

Net income up 2.5x in first nine months

For the first nine months of the year, revenue stands at $2.68bn. This marks an increase of 46.3% yearly. So far, income from sales-type leases has generated the most revenue for Vici, at $1.47bn.

Operating expenses for the first nine months fell significantly by 70.3% to $290.4m. The disparity is due to a decrease in the change in allowance for credit losses. In the first three quarters of 2022 this was $865.4m, whereas in the same period of time in 2023 this was $166.1m.

However, interest expense climbed by 65.3% to $612.8m year-on-year. Nonetheless the net income for the first nine months of 2023 totalled at $1.79bn, two and a half times higher than $521.4m recorded in 2022.

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