Magna loss down on quarter

Magna Entertainment Corp., the racetrack owner and operator, lost $26.3 million in the second quarter of 2006, a slight improvement over the company's $26.9 million loss in the second quarter of 2005, according to financial statements released by the company late Wednesday.

The 2006 results were dragged down by significantly higher interest payments on the company's ballooning debt. In the quarter, interest payments were $16.1 million, compared with $7.7 million in the second quarter of 2005. A sizeable portion of Magna's debt is held by its parent company, MI Developments.

Revenue in the quarter was up 9.7 percent to $184.6 million, compared to $168.3 million in the second quarter last year. Expenses jumped 14.4 percent from $182.7 million to $209 million.

Magna had negative cash flow in the quarter of $19.2 million. The company's long-term liabilities, including debt due its parent, other long-term debt, and $220 million in notes, has reached $650 million.

Magna is hoping to close a deal to sell its Meadows harness track in Pennsylvania later this year, provided the facility is licensed for slot machines. The company plans to use $200 million in proceeds from the sale to draw down portions of its debt.