Great Canadian Gaming Corporation has published Q4 and full-year financial results for the period ended December 31, 2020, highlighting the significant effect that COVID has had and continues to have on the business.
The temporary suspension of all of the company’s gaming facilities for the majority of 2020 resulted in decreases in revenues, expenses, adjusted EBITDA, shareholders’ net earnings (loss), free cash flow, and total cash flows, year-on-year.
While the firm’s Ontario and Atlantic properties were permitted to reopen for a portion of the fourth quarter, gaming revenues in each jurisdiction were significantly reduced due to the restricted operating conditions.
The company’s negative free cash flow of $97.4m in Q4 and $326.4m in the full year (2019: $23.2m and $54.5m) increased, primarily due to decreased adjusted EBITDA from the temporary suspension of operations and increased interest paid, partially offset by lower income taxes paid.
The negative free cash flow was funded with borrowings from the company’s credit facilities, and the remaining from available cash balances.
Cash outflow for the fourth quarter was $37.1m, compared to cash inflow of $19.9m in the same period from the prior year. The change from cash inflow to cash outflow was primarily due to a decrease in cash generated from operating activities as a result of the temporary suspension of operations, partially offset by lower capital expenditures due to construction timing of the company’s development projects in Ontario.
Cash inflow for the full year was $105.1m, compared to cash outflow of $7.1m in the same period from the prior year. The change from cash outflow to cash inflow was primarily due to $189m of gross proceeds received from the Senior Unsecured Debentures, increased borrowings under credit facilities, lower capital expenditures, and lower repurchases of common shares under the normal course issuer bid.
These were partially offset by a decrease in cash generated from operating activities as a result of the temporary suspension of operations.
Interim CEO Terrance Doyle commented: “As we continue navigating through this period of uncertainty, we have made significant steps to position the company for long-term success, as demonstrated by the arrangement with Apollo Funds.
“This arrangement represents a great opportunity for shareholders and we are grateful for their strong support received in favor of this arrangement. The company is working diligently to satisfy all closing conditions, including required regulatory approvals, to complete this transaction.”
He added: “We worked diligently since the onset of the pandemic on our comprehensive reopening plans which positioned the company to safely reopen its Ontario and Atlantic properties for a portion of the fourth quarter.
“Due to the continuing volatility of the Pandemic, the majority of the company’s properties were closed as at December 31, 2020. The health and safety of our team members and guests is of utmost importance and the company remains ready to reopen our properties again when it is safe to do so.”