November 12, 2009 / 9:35 PM / in 8 years

UPDATE 2-Great Canadian Gaming Q3 profit jumps 67 pct

* Q3 EPS C$0.11 vs C$0.07 a yr ago

* Revenue falls 9 pct (Adds details, analyst comments)

By Amit Kumar

BANGALORE, Nov 12 (Reuters) - Great Canadian Gaming Corp GC.TO, an operator of casinos and thoroughbred racetracks, posted a 67 percent rise in third-quarter profit as cost-cutting measures more than offset a decline in revenue.

“Their ability is not just to take costs out of the business but those cost reductions have been sustainable on a go-forward basis, which is driving the EBITDA margin,” Raymond James analyst Kenric Thyge said by phone.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) as a percentage of revenue was 35.6 percent in the third quarter, compared with 28.1 percent a year ago.

The company has cut down on the number of hours its casinos are open and reduced the shift hours of its employees to cut costs, Thyge said.

The company reported net income of C$9.5 million, or 11 Canadian cents a share, compared with C$5.7 million, or 7 Canadian cents a share, a year ago.

Revenue dropped 9 percent to C$96.0 million, hurt by a weakened economy that reduced gaming and hospitality revenues at the company’s properties.

Expenses fell 15 percent to C$75.1 million for the quarter.

Analysts on average were expecting earnings of 9 Canadian cents, on revenue of C$98.2 million, according to Thomson Reuters I/B/E/S.

Shares of Great Canadian Gaming, which have gained 83 percent in value in the last six months, closed at C$7.65 Thursday on the Toronto Stock Exchange. (Reporting by Amit Kumar in Bangalore; Editing by Anne Pallivathuckal)

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