Vici Properties set aside an extra $117 million to cover the risk of operators failing to meet their obligations in the second quarter, even though their income reached $662.5 million (£543.6 million/€649.1 million). This was their first quarter since finalizing two massive acquisitions.
Vici’s CEO, Edward Pitoniak, stated that the second quarter marked the first period for Vici since their $4 billion acquisition of the Venetian Resort in Las Vegas at the end of the first quarter of 2022, and their $17.2 billion acquisition of MGM Growth Properties, with a focus on expanding their operations.
“The second quarter of 2022 was another pivotal period for Vici,” Pitoniak remarked. “In late April, we finalized our strategic acquisition of MGM Growth Properties, positioning Vici as one of the most appealing Class A real estate portfolios within the US REIT sector.
“Our ability to secure capital has enabled us to capitalize on opportunities and continue our path of growth.”
Even when factoring in rent from properties acquired within the past year into the comparative data, revenue surged by 76% compared to $376.4 million in the second quarter of 2021.
Overall, $375.1 million in revenue originated from sale-leaseback agreements, representing a 28.8% year-over-year increase. Revenue generated from lease financing receivables and loans experienced a substantial rise, climbing 273.9% to $2.617 billion.
Vici allocated an additional $117 million to provisions for operator default risk during the second quarter – Casinos – iGB
Additional revenue streams, including golf-related earnings, contributed to the remaining $25.7 million.
Operational expenses reached $602.5 million, a stark contrast to the negative $7.7 million recorded in the corresponding period of 2021.
The most significant expense was tied to asset reclassification stemming from the acquisition. However, a heightened likelihood of short-term defaults by Vici’s tenants, who manage the casino properties they possess, led to an extra $117 million in expenditures.
The company also incurred $133.1 million in interest charges. After accounting for financial and interest income, Vici experienced a pre-tax deficit of $57.1 million.
Following tax adjustments, the net loss for the period amounted to $58.1 million, a significant downturn from the $300.3 million profit recorded in the same period of the previous year.
Total revenue for the initial six months of the year reached $1.07 billion, marking a 43.7% surge compared to the first half of 2021. Sales-type lease revenue emerged as the primary source of income, generating $581.2 million in the six months concluding on June 30.
Operational costs for the first half of the year totaled $708 million, reflecting a year-over-year increase of $691 million.
After factoring in income taxes and other expenses, the net loss amounted to $182.6 million.
Prior to the quarter’s conclusion, 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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