Kerzner International Limited (NYSE:KZL) Wednesday reported net income for the quarter, excluding non-recurring items and operating results from Kerzner Interactive, the Company's internet gaming venture, of $2.2 million as compared to a net loss of $7.5 million for the same period last year.
On this basis, net income per share for the quarter was $0.08 as compared to a net loss per share of $0.28 in the same period last year. These third quarter results excluded a net loss of $1.8 million from Kerzner Interactive and an extraordinary loss of $0.9 million related to the early extinguishment of debt. Non-recurring items in 2001 included pre-opening expenses related to the launch of Kerzner Interactive, net gain on sale of real estate at the Company's Paradise Island operations and restructuring and refinancing costs.
The Company reported EBITDA for the quarter, excluding non-recurring items and Kerzner Interactive, of $25.9 million, a 44% increase over the September 11-affected results in the same period last year. In the quarter, EBITDA was marginally higher than the same period in 2000, when the Company reported EBITDA of $25.3 million adjusted to exclude Resorts Atlantic City. Butch Kerzner, President of the Company commented, "Atlantis continues to produce strong results despite a general downturn in the travel market. Our Paradise Island operations achieved record third quarter revenues and EBITDA as it continues to benefit from strong brand recognition and the broadening of its source markets."
In the quarter, the Company received a $4.5 million option payment from Station Casinos, Inc. ("Station"), arising from the previously announced agreement to restructure the potential sale of 50% of Kerzner Interactive to Station.
The Company recorded a net loss, including non-recurring items and Kerzner Interactive, in the quarter of $0.4 million, compared to a net loss of $11.7 million for the same period last year. On this basis, the Company reported a net loss per share for the quarter of $0.02 compared to a net loss The Company's Paradise Island operations achieved gross revenues and EBITDA of $112.5 million and $24.2 million in the third quarter, representing increases of 13% and 69%, respectively, over the same period last year. Gross revenues and EBITDA for the period were the highest ever achieved by the Paradise Island business for a third quarter, exceeding the previous record results of $104.3 million and $23.2 million, respectively, recorded in the third quarter of 2000. The comparable period in 2001 was affected by the results of September 11, although business had been very strong in July and August of that year.
Atlantis' revenue per available room ("RevPar") for the quarter was approximately $175, a 5% increase over the same period last year. For the quarter, Atlantis achieved an average occupancy of 82% at a $214 average daily room rate ("ADR"). These results compare to an average occupancy of 74% and ADR of $224 in 2001, and an average occupancy of 84% and ADR of $211 in 2000.
The Atlantis casino reported record table drop volumes for the third quarter predominantly due to the timing of the Michael Jordan Celebrity Invitational, which was held in mid September and was broadcast by NBC. Table drop in the quarter increased by 18% over the same period last year and 3% versus 2000. Slot volumes increased by 11% in the quarter compared to the same period last year and were 6% higher than in the third quarter of 2000.
The Company's luxury resort hotel on Paradise Island , the Ocean Club, performed very well and we believe it continues to outperform other luxury resorts in its category. RevPar in the quarter was approximately $350, an increase of 28% over the same period last year, with an average occupancy of 65% and an ADR of $539.
Harborside at Atlantis ("Harborside"), the Company's 50% owned timeshare joint venture on Paradise Island , was closed at the end of August 2002 in order to repair major damage resulting from adverse weather primarily due to Hurricane Michelle. Since the temporary closure, Harborside's guests have been moved to Atlantis. Harborside is presently in discussion with its insurers regarding a potential insurance claim. Harborside is expected to re-open by the end of 2002.
