Riviera hit by Strip competition

Monday, July 26, 1999 | 11:50 a.m.

Riviera Holdings Corp. reported a net loss of $812,000 for the second quarter, down from a $2.4 million net loss in the same 1998 period.

Revenue slipped 3.7 percent, to $40.7 million from $42.2 million, the company said today.

Cash flow fell to $6.9 million from $8.9 million, due largely to bad luck at the gaming tables. Riviera Holdings said table-game hold percentage fell to 14.3 percent in the latest quarter from 19.5 percent in the year-ago period.

For the first half, Riviera posted a net loss of $646,000, compared with a $2.7 million net loss in the first six months of 1998. Revenue was flat at about $81 million for each period.

Increased competition from the new resorts that have opened on the Strip over the past nine months "has modestly affected some segments of the company's operations," said Riviera Chairman Bill Westerman.

"We had anticipated this situation and took steps to maintain our historically high occupancy rates, which drive our slot revenues," he said.

"These steps resulted in an increase in occupancy of 1.2 percentage points to 98.5 percent for the quarter, one of the highest on the Las Vega Strip. This helped us achieve the highest slot revenues in the history of the company for any quarter and six-month period."

Westerman also said the company "topped out" the construction of its Riviera Black Hawk Casino in Colorado last week. He said construction is ahead of schedule for the planned opening in early 2000.

The casino will be the closest gaming site to Denver, he said, and will feature 1,000 slot machines, 12 table games and a 520-space parking garage.

"We're very encouraged by the continued growth and success of the Black Hawk market, which has grown by 31 percent during the first six months of 1999," Westerman said. "We believe the market will continue to grow as larger properties equipped with more amenities and parking are introduced."

Riviera stock was unchanged at $5.75 a share on the American Stock Exchange today.