Great Canadian Gaming Corporation has announced its Q1 financial results for the three month period ended March 31, 2021, cautioning that the COVID-19 pandemic continues to have a significant impact on the company’s business.
The temporary suspension of operations and restricted operating conditions that the company’s gaming facilities experienced in the first quarter of 2021 resulted in decreased revenues, expenses and adjusted EBITDA year-on-year.
While certain of its Ontario and Atlantic properties were permitted to open under restricted operating conditions for a portion of the first quarter of 2021, gaming revenues at these properties were significantly reduced when compared to the same period in the prior year.
The company experienced negative free cash flow of $70.5m in Q1 compared to $50.8m year-on-year. The increase in negative free cash flow was, said the firm, primarily due to decreased adjusted EBITDA, partially offset by lower income taxes paid, interest paid and capital expenditures.
For the first quarter of 2021, the company funded the negative free cash flow with net borrowings from its credit facilities of $32.6m and the remaining $37.9m from available cash balances.
Cash inflow in the first quarter of 2021 of $2.7m was primarily due to the proceeds from the exercise of incentive share options of $44.8m. Cash inflow in the first quarter of 2021 was lower than cash inflow of $552.2m year-on-year, primarily due to decreased cash generated from operating activities.
Interim CEO Terrance Doyle told investors: “Significant progress has been made in the closing of the arrangement with Apollo Funds, as demonstrated by the recent Investment Canada Act approval.
“We believe this transaction is beneficial for our shareholders, our team members, our guests, and other stakeholders, and we are working diligently to satisfy all remaining closing conditions, including required regulatory approvals.
“Great Canadian remains committed to help contain the spread of COVID-19 by adhering to all directives and guidance issued by public health authorities in each jurisdiction that we operate, including suspending our operations when mandated to do so.
“Our ability to respond to local health mandates promptly and efficiently is a testament to the preparation and readiness of our team members. The company remains focused on reopening our gaming properties and ancillary amenities as appropriate, and our teams have demonstrated through our results thus far that we can operate while continuing to prioritize the health and safety of team members and guests.”
On the outlook, he said: “We have reason to remain optimistic, despite the challenges we have faced since the start of the pandemic. For our properties that were allowed to reopen, we have observed encouraging visitation levels despite operating under restricted conditions.
“Additionally, we are encouraged by the continued progress of the mass vaccination program across Canada, as well as the initial results of the wider reopening of other markets where vaccination levels are higher.”