Aladdin improves cash flow for the year
Wednesday, Jan. 22, 2003 | 11:16 a.m.
The Aladdin hotel-casino posted $276 million in revenue and significantly improved cash flow last year despite a weak December, the company reported Tuesday in a federal bankruptcy court filing.
"We are coming into our own as a full service resort," Aladdin spokeswoman Tyri Squyres said. "We continue to increase our entertainment offering, which drives traffic."
After declaring bankruptcy, the Aladdin slowly has been improving its cash flow, which reflects earnings before interest, taxes, depreciation and amortization. Cash flow is a common measure of a casino's profitability.
The company says that its cash flow was $38 million for 2002, up about 33 percent from the previous year. Aladdin officials had hoped for $40 million, but a bad December hurt the casino and Las Vegas in general.
"December started off a little slow for everybody in town," Squyres said.
Cash flow at the Aladdin for December was $1.3 million, compared with $5.1 million in November and $3.4 million in October.
Squyres said business picked up in late December.
"A lot of the cash flow from New Year's doesn't hit until January," she said.
Since filing for Chapter 11 protection in Sept. 2001 in U.S. Bankruptcy Court, the Aladdin has posted a total of $50.7 million in cash flow.
Revenues in December also dipped to $18.3 million after a two-month spike of $22.5 million in November and $19.1 million in October.
The Aladdin is the Strip's newest megaresort. It was forced to file for bankruptcy after it ran over budget and failed to attract enough visitors to make interest payments. The casino has been negotiating with possible buyers and hopes to complete a sale this year.
Andrew Zarnett, a gambling analyst with Deutsche Banc, said the casino will have to improve its finances if investors want to fetch a good price.
"Their cash flow is significantly lower than what they need to achieve in order to get their proposed $450 million to $500 million valuation," he said.
The Aladdin owes secured creditors more than $537 million and about $85 million to unsecured creditors, court records show.
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