Century Casinos (NASDAQ: CNTY) is undergoing a strategic reassessment that may expand its international reach, as the gaming corporation is considering divesting its Canadian venues and its stake in Casinos Poland to enhance shareholder value.
During an earnings call on Friday, the company shared updates regarding its strategic review with analysts and investors. Co-CEO Peter Hoetzinger mentioned that various options for divesting its Canadian operations, which include two commercial casinos and two racetracks in Alberta, are being explored.
“We could either sell all four properties as a package or separate the sales between the racinos and the commercial casinos,” said Hoetzinger during the call. “There’s interest in both, and one option is progressing faster than the others. We anticipate being able to disclose details about at least one of these packages by year-end.”
Hoetzinger further clarified that Century is awaiting “greater clarity on the asset sales” before it makes substantial commitments related to debt reduction.
Increased Pressure to Divest Casinos Poland
The uncertainty surrounding Century’s two-thirds stake in Casinos Poland has been a concern for both analysts and investors. Hoetzinger indicated that two unidentified groups are currently conducting due diligence on the Polish assets.
While he recognized that obstacles exist regarding the potential sale of the Poland stake due to regulatory challenges and the ongoing conflict in Ukraine, he noted that no preference has been established between the two interested parties and that clarity could emerge “in a few months, though it’s difficult to predict.”
At this stage, Century’s investors might welcome a divestment of its Casinos Poland interest, as it has become a burden on earnings before interest, taxes, depreciation, and amortization (EBITDA).
“Once a stable operation, Poland has now turned into a consistent challenge, with current run-rate EBITDA remaining several million dollars lower than pre-pandemic figures,” stated Citizens Research analyst Jordan Bender in a report to clients.
Potential Investor Disappointment
Century’s investors have been vocal about the need for value generation as the company’s stock has plummeted by 91% over the last five years. While disposing of international operations in favor of a focused U.S. approach could satisfy some shareholders, others may still be left wanting more.
“We believe this move was somewhat anticipated following Q1 commentary and recent leadership transitions, but many investors likely preferred a complete sale of the company as the ideal outcome,” remarked Stifel analyst Jeffrey Stantial.
If Century proceeds with selling its assets in Canada and Poland, it will be left with seven casinos in the United States—two each in Colorado and Missouri, with additional locations in Maryland, Nevada, and West Virginia.