THRSF Thunderbird Resorts Inc (CE)

EDISON EQUITY RESEARCH: Thunderbird Resorts - Disposal materially reduces debt


Thunderbird’s sale of its Costa Rica operations materially reduces its debt burden and was achieved at an encouraging EV/EBITDA (c 7.1x on our estimates) given the current pressures on the Costa Rica economy. It retains two parcels of real estate in San José, Costa Rica, which are up for sale. We now expect Thunderbird to focus on the selective expansion of its Peru operations, to strengthen underlying cash flows. We have slightly trimmed 2014 estimates post the December monthly revenue report and 2015 forecasts are under review until the final results are reported in April.

Thunderbird Resorts operates gaming and hospitality businesses in Peru and Nicaragua, having recently sold its Costa Rica business. Its casinos and slot parlours have over 2,400 gaming positions. In July 2013 it sold its Philippines operations, which accounted for 45% of EBITDA at that time.

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