04/30/2006 11:00PM

Magna posts profit


Magna Entertainment Corp., the owner of Santa Anita Park in California, Gulfstream Park in Florida, and other racetracks, had net income of $2.2 million in the first quarter of 2006, according to financial statements released Monday. It was the first quarterly profit the company has posted in two years.

Revenue in the quarter was $281.5 million, compared with revenue of $245.7 million in the first quarter of 2005, when Magna had a net loss of $4.1 million.

Revenue from Magna's tracks in California, Florida, and Maryland were up significantly in the first quarter this year compared with last year, and the company had $14.8 million in new revenue from slot machines at its Remington Park in Oklahoma. The machines were installed late last year.

Before the quarter, Magna had lost $320.5 million over the last three years and has grown increasingly indebted to its parent company, MI Developments, to fund a complete renovation of Gulfstream Park and other projects. The company has also struggled to generate positive cash flow.

In a statement, Magna officials said that the company benefited in California from additional racing days at its two racetracks, Santa Anita Park in Southern California and Golden Gate Fields near San Francisco, along with improved weather this quarter compared with last.

In Maryland, revenue increased by $3.2 million because of additional racing days and higher wagering handle, and in Florida, revenue increased by $5.7 million over last year, according to the statements.

Magna had net cash flow of $4.1 million in the first quarter, but the company took $42.1 million in cash from a loan from MI Developments during the quarter. Magna owes $145 million to MI Developments, but it plans to repay that loan this year from the proceeds of a planned sale of The Meadows racetrack, a harness track in Pennsylvania. Magna has an agreement to sell the Meadows and its offtrack betting facilities for $225 million, contingent on the track receiving a slot-machine license this year from state regulators.