Magna Reports 2nd Quarter Loss of $26.9M

Feeling the pinch of losing its Bay Meadows lease and the continued drain brought on by the rebuilding Gulfstream Park and Laurel, Magna Entertainment reported $26.9 million in second-quarter losses, the company disclosed Thursday. That translates to a loss of 25 cents a share.

California revenues decreased $15.2 million primarily due to the expiration of its Bay Meadows lease at the end of 2004. MEC also saw a $3 million decrease from its Southern tracks, mostly due to lower attendance and smaller field size at Lone Star Park.

"Our financial results for (the first two quarters of 2005) are disappointing in absolute terms, and as compared to the prior year," MEC president and CEO Tom Hodgson said in a released statement. "At the same time, they are in line with our expectations for 2005, and are consistent with our previously stated expectation that MEC will continue to incur operating losses through 2006, but is expected to achieve sustainable operating profitability in 2007 and beyond."

Revenues were $176 million for the three months ended June 30, a decrease of $22.5 million or 11.3% compared to $198.5 million for the three months ended June 30, 2004.

For the first two quarters of 2005 combined, revenues were $428.4 million, a decrease of $61.9 million or 12.6% compared to $490.3 million for the six months ended June 30, 2004.

Magna cited drops in attendance and wagering at their two leading winter tracks, Santa Anita and Gulfstream parks. They said significant rainfall in Southern California caused declines at Santa Anita while Gulfstream was hindered by disruptions due to the track redevelopment project and the use of temporary facilities.

A teleconference to discuss the results is scheduled for Friday morning.