Vici Properties announced earnings of $662.5 million (£543.6 million/€649.1 million) for the second quarter, the initial period since the company finalized two multi-billion dollar purchases. However, the company also faces additional costs stemming from the risk of operator tenant non-payments.
Vici set aside $117 million in the second quarter to cover the potential for operator defaults.
Vici’s chief executive, Edward Pitoniak, stated that the quarter was focused on expansion, as it was the first since Vici acquired the Venetian Resort in Las Vegas for $4 billion and MGM Growth Properties Inc for $17.2 billion.
“The second quarter of 2022 marked another significant period for Vici,” Pitoniak said. “At the end of April, we completed our strategic acquisition of MGM Growth Properties, establishing Vici as one of the most appealing Class A real estate portfolios within the REIT sector.
“Our access to capital has improved, enabling us to pursue opportunistic transactions as we continue our growth trajectory.”
Even when incorporating rent from properties obtained in the past year into the comparative data, revenue still rose by 76% compared to $376.4 million in the second quarter of 2021.
In total, $375.1 million in revenue originated from sale-leaseback rentals, a 28.8% year-over-year increase. Revenue from lease financing receivables and loans experienced a substantial surge, up 273.9% to $2.617 billion.
Vici added $117 million to its provision for the risk of operator defaults in the second quarter – Casinos – iGB
The remaining $25.7 million was generated from various sources, including other revenue streams and golf-related earnings.
During the second quarter of 2021, operational expenses amounted to a negative $7.7 million, while in the current quarter, they reached a substantial $602.5 million.
The most significant expense was attributed to the reclassification of assets in connection with the acquisition. Furthermore, there was an additional $117 million in expenses stemming from the heightened likelihood of short-term defaults by Vici’s tenants, who manage the casino properties they own.
The company also incurred $133.1 million in interest charges. After accounting for financial and interest income, Vici’s pre-tax loss totaled $57.1 million.
Following the application of taxes, the net loss for the period amounted to $58.1 million, contrasting with a profit of $300.3 million during the same period last year.
Revenue for the first six months of the year reached $1.07 billion, reflecting a 43.7% increase compared to the first half of 2021. Sales-type lease revenue emerged as the primary source of income, attaining $581.2 million in the six months ending on June 30.
Operational expenses for the first half of the year totaled $708 million, representing a year-over-year increase of $691 million.
After taking into account income taxes and other expenses, the net loss amounted to $182.6 million.
Prior to the conclusion of the quarter, Vici appointed Kellan Florio as Senior Vice President and Chief Investment Officer and Moira McCloskey as Vice President of Capital Markets.
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