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Cosmopolitan Narrows 2nd Quarter Loss to $54.3 million on Net Revenue of
$126.1 million, Intensifying Efforts to Boost Casino Revenue

By Steve Green, Las Vegas SunMcClatchy-Tribune Regional News

Aug. 15, 2011--The Cosmopolitan resort on the Las Vegas Strip posted another quarterly loss on Monday as it intensifies efforts to boost casino revenue.

The property's owner, Nevada Property 1 LLC, said it lost $54.3 million on net revenue of $126.1 million for the second quarter ended June 30.

Comparable numbers don't exist for 2010's second quarter since the property opened on Dec. 15.

Sequentially, results from the property's casino declined from the first quarter. Gaming revenue in the second quarter of $28.2 million was down from $31 million.

Nevada Property 1, owned by Deutsche Bank, said in its quarterly financial report today that while casino volumes improved in the second quarter, the casino played unlucky with its table games hold percentage coming in at 11.6 percent -- down from the expected range of 12 percent to 15 percent.

"Our focus on hosted table games customers continues to yield solid results. We continue to focus on supplementing the level of table games play at the property," the Cosmopolitan said.

The company said the second quarter results included a $2 million charge to write off the value of a lounge, which will be demolished to make way for an additional high-limit gaming area. The 9,600-square-foot area will include 15 table games and is expected to be completed by November.

With more hotel rooms available and a strong performance by the hotel, the property's overall net loss declined from $56.8 million in the first quarter.

The property opened with 1,998 rooms with plans to add 968 more rooms through September. As of June 30, 520 of the additional rooms had been added to inventory, boosting the number of available rooms to 2,518.

Hotel revenue in the second quarter of $45.9 million was up from $34.4 million in the first quarter thanks to the extra rooms, strong room rates ($246 on average) and occupancy trends (91.4 percent on average).

Food and beverage revenue at the property, known for its restaurants and nightclub offerings, continued to generate the biggest chunk of revenue -- $70.1 million in the second quarter v. $57.6 million in the first quarter.


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