Thursday, May 10, 2012 | 12:45 p.m.
The Cosmopolitan of Las Vegas on the Strip has reported a smaller first-quarter loss than last year with a big jump in nongaming revenue.
The Cosmopolitan lost $23.4 million in this year’s first quarter vs. a loss of $56.8 million in the first quarter of 2011, when the newly owned property was in its ramp-up stage.
The property was cash-flow positive in the latest quarter after factoring out $42 million in noncash depreciation and amortization expenses.
EBITDA — earnings before interest, taxes, depreciation and amortization — came in at a positive $22.2 million vs. a negative $8.3 million in the year-ago quarter.
Net revenue increased from $105 million to $143.1 million.
The property, which has some 2,960 rooms, is owned by Deutsche Bank.
It opened on Dec. 15, 2010, and has struggled to turn a profit as its casino revenue has been far exceeded by revenue from its hotel rooms, restaurants and nightclubs.
That situation is different than at many competing properties, where casino revenue is king.
Casino revenue at the Cosmopolitan continued to show weakness in the first quarter, coming in at $30.8 million, down from $31 million in the year-ago quarter.
The Cosmopolitan, in its earnings report Wednesday, said the casino results were hurt by unlucky play at its table games. They held, or won, just 9.7 percent of the money wagered by gamblers during the quarter vs. the expected hold of 12 percent to 15 percent.
The Cosmopolitan said in Wednesday’s report that it remains focused on boosting table game activity and on lifting slot play by promoting its Identity loyalty program and building its database of slot players.
With business picking up and 682 newly completed hotel rooms added to its inventory vs. the 2011 quarter, food and beverage revenue jumped from $57.6 million to $71.8 million and room revenue soared from $34.4 million to $59 million.
The hotel generated impressive numbers in the quarter with the average daily room rate of $253, up from $245, and occupancy of 86.8 percent, up from 85.3 percent.
Wednesday’s report, signed by CEO John Unwin, revealed a potential legal headache for the Cosmopolitan in the form of a threatened class-action lawsuit claiming certain employees haven’t been paid for all hours worked.
“The company is in the process of evaluating the notice of intent” to sue, the Cosmopolitan said.
Litigation appears to be winding down, though, between the Cosmopolitan and most would-be buyers of its hotel-condominium units.
The company disclosed Wednesday it reached settlements with 178 buyers in the first quarter in which they received refunds of their earnest money deposits of either 50 percent or 40 percent, depending on the unit. Big declines in local luxury condo values during the recession caused many buyers to back out of purchase deals at the Cosmopolitan and elsewhere.
Similar settlements were reached with hundreds more Cosmopolitan purchasers between 2009 and this year, and unsold units have been added to the hotel inventory.