Seaport Entertainment Group’s Mixed Q1 2025 Earnings Call

Seaport Entertainment Group Inc. ((SEG)) has held its Q1 earnings call. Read on for the main highlights of the call.

Seaport Entertainment Group Inc. recently held its earnings call, presenting a balanced view of the company’s performance. The call highlighted significant achievements in the entertainment sector and operational improvements that led to better financial performance. However, the company also faced challenges with declining hospitality revenues and a net loss for the quarter.

Entertainment Segment Growth

The entertainment segment of Seaport Entertainment Group saw a notable increase in revenue, rising by 18% compared to Q1 2024. This growth was fueled by successful events, such as concerts at the Rooftop at Pier 17 and increased ticket sales for the Las Vegas Aviators. These events have positioned the company well within the entertainment industry.

GITANO New York City Opening

The soft opening of GITANO New York City at Pier 17, followed by a grand opening event in May, received positive press. This has set GITANO up as a key destination in New York City, enhancing the company’s presence in the hospitality sector.

Improvement in Financial Performance

Despite a decline in overall revenue, the Tin Building improved its first-quarter asset level EBITDA by 7% compared to Q1 2024. Additionally, the company’s overall operating EBITDA increased by 10% compared to the previous year, indicating effective cost management and operational efficiency.

Reduction in General and Administrative Expenses

Seaport Entertainment Group achieved a significant reduction in general and administrative expenses, which decreased by 41% year-over-year. This was primarily due to non-repeating separation expenses from Q1 2024, showcasing the company’s efforts to streamline operations.

Positive Net Debt Position

The company reported a positive net debt position, with net debt to gross assets at negative 4%. This was supported by healthy cash and cash equivalent balances totaling $132 million, providing a strong financial foundation.

Decline in Hospitality Revenues

Hospitality revenues saw a decline of 16%, with a notable 33% reduction at the Tin Building due to strategic closures. Same-store hospitality revenues were down 12% year-over-year, reflecting challenges in this segment.

First Quarter Revenue Decline

Seaport Entertainment Group reported total consolidated revenues of $16.1 million for Q1 2025, marking a 12% decrease compared to pro forma Q1 2024. This decline highlights the challenges faced in maintaining revenue levels.

Decreased Entertainment Operating EBITDA

The entertainment operating EBITDA decreased by 2% versus Q1 2024, attributed to elevated programming expenses. This indicates the need for cost management in the entertainment segment.

Net Loss for the Quarter

The company reported a net loss of $31.9 million for the first quarter, though this was an improvement compared to the previous year. This reflects ongoing challenges but also progress in reducing losses.

Forward-Looking Guidance

Seaport Entertainment Group outlined its strategic priorities aimed at achieving financial stability and growth. The company plans to address cash burn to reach breakeven by 2026, achieve profitability by 2027, and stabilize the asset base by 2028. Key initiatives include optimizing the Tin Building’s operations, improving cash flow through strategic leasing, and monetizing non-cash flowing assets like 250 Water Street. The company also announced plans to develop 17,500 square feet of event space at Pier 17, enhancing its capacity to host large-scale events.

In summary, Seaport Entertainment Group’s earnings call presented a mixed picture, with significant achievements in the entertainment sector and operational improvements, but also challenges in hospitality revenues and a net loss for the quarter. The company’s forward-looking guidance reflects a strategic focus on achieving financial stability and growth in the coming years.