Announcements

Consolidated unaudited results for Q2 and H1 2016

Posted on 26.07.2016

Key performance indicators of the Group

    H1 2016 H1 2015 H1 2014
Revenues m€ 92.4 81.0 72.2
Gaming tax m€ 17.1 15.5 14.3
EBITDA m€ 17.1 18.4 16.7
EBIT m€ 12.0 14.5 12.6
Net profit m€ 9.8 11.8 10.3
EBITDA margin % 18.5 22.7 23.1
Operating margin % 13.0 17.9 17.5
Net margin % 10.5 14.6 14.3
         
Assets m€ 188.9 125.0 115.4
Equity m€ 108.8 106.8 97.8
ROE % 9.2 12.2 10.8
ROA % 5.8 9.8 8.8
Current ratio times 0.8 2.2 2.3
         
Casinos at end of period # 125 96 93
Casino floor area at end of period m2 40,122 30,263 31,060
Employees # 3,260 2,653 2,593
         
Slot machines at end of period # 4,159 3,275 3,072
Electronic roulette terminals at the end of period # 148 104 102
Gaming tables at end of period # 198 182 190
Tournament poker gaming tables at the end of period # 63 44 32

 

Key developments of the Group during the first half-year of 2016

  • The Group’s consolidated sales revenues for H1 2016 amounted to EUR 92.0 million, up 14.0% or EUR 11.3 million y‑o‑y.
  • Gaming revenues accounted for 93.6% (86.1 m€) and other revenues for 6.4% (5.9 m€) of the Group’s consolidated sales revenues for H1 2016. A year before the revenue split was 94.0% (75.9 m€) and 6.0% (4.8 m€), respectively.
  • The Group’s consolidated EBITDA for H1 2016 amounted to EUR 17.1 million, a decline of 6.9% from EUR 18.4 million a year before. The Group’s consolidated operating profit decreased EUR 2.4 million (-16.9%) to EUR 12.0 million.
  • The Group’s consolidated net profit attributable to equity holders of the parent company for H1 2016 totalled EUR 9.8 million compared to EUR 11.8 million a year ago.
  • Group company Baina Investments Sp. z o.o. signed the agreement on 14 January 2016 to acquire a 20% holding in the Polish subsidiary Casino Polonia-Wrocław Sp. z o.o., increasing Group holding to 100%.
  • After receiving an approval from the Estonian Competition Authority, on 16 February 2016 Group completed the acquisition of 100% shareholding in Estonian casino operator AS MC Kasiinod, which is also the 100% owner of the subsidiary OÜ Oma & Hea, which is providing casino bar services. As a result of the completion of the transaction Group owns 24 casinos in Estonia.
  • The Estonian subsidiaries of Group, Olympic Casino Eesti AS and the casino operating company AS MC Kasiinod which was acquired in winter of 2016, concluded a merger agreement on 21 March 2016. The merger was finalised in May 2016 and during the course of the merger AS MC Kasiinod merged with Olympic Casino Eesti AS.
  • The Slovak subsidiaries of Group, Olympic Casino Slovakia S.r.o. and Olympic F&B S.r.o., concluded a merger agreement on 22 March 2016. The merger was finalised in April 2016 and during the course of the merger Olympic F&B S.r.o. merged with Olympic Casino Slovakia S.r.o.
  • On 31 March 2016 Group decided to liquidate its Dutch subsidiary Siquia Holding B.V., which does not have any business activity. The area of activity for the subsidiary was holding activities. The liquidation was finalised on 30 June 2016.
  • The Latvian subsidiaries of Group, Olympic Casino Latvia SIA AS and the casino operating company SIA Garkalns which was acquired in autumn 2015, concluded a merger agreement on 20 May 2016. The merger will be finalised within the current year and during the course of the merger SIA Garkalns will be merged with Olympic Casino Latvia SIA.
  • On 1 June 2016 Group opened a new hotel and entertainment complex in Tallinn investing over 45 million euros in the building that accommodates the Baltic's first Hilton and the flagship casino of OEG.
  • The general meeting of shareholders held on 16 June 2016 decided to pay out dividends in amount of EUR 22,768,680.90 (EUR 0.15 per share), of which EUR 0.10 per share was paid out to shareholders on 15 July 2016 and EUR 0.05 will be paid out to shareholders on 14 October 2016.

 

The Group’s consolidated sales revenues by segments:

‘000€ Q2 2016 Q2 2015 Change H1 2016 H1 2015 Change
Estonia 10,592 9,068 16.8% 20,123 17,412 15.6%
Latvia 15,205 13,959 8.9% 31,229 26,052 19.9%
Lithuania 6,003 4,923 21.9% 12,291 10,789 13.9%
Poland 4,656 6,843 -32.0% 9,229 13,339 -30.8%
Slovakia 4,791 4,076 17.5% 8,714 7,806 11.6%
Belarus 64 203 -68.4% 186 487 -61.9%
Italy 2,759 2,525 9.3% 5,465 4,825 13.3%
Malta 2,552 0 N/A 4,738 0 N/A
Total 46,622 41,597 12.1% 91,975 80,710 14.0%

 

Number of casinos by segment:

  30 June 2016 30 June 2015
Estonia 24 20
Latvia 57 37
Lithuania 19 17
Poland 1 1
Slovakia 8 7
Belarus 1 2
Italy 14 12
Malta 1  
Total 125 96

 

The Group’s consolidated operating expenses for H1 2016 amounted to EUR 80.4 million, up 20.9% or EUR 13.9 million y‑o‑y. The growth was highest in personnel expenses (+4.2 m€, +18.9%), gaming tax (+1.7 m€, +10.9%), marketing expenses (+1.7 m€, +32.5%), amortisation and depreciation costs (+1.2 m€, +29.9%) and rent expenses (+1.2 m€, +18.5%). Personnel expenses (26.4 m€) and gaming tax (17.1 m€) represented the largest cost items accounting for 54.1% of total operating expenses.

 

Overview by markets

Estonia

The sales revenues of Estonian segment for H1 2016 amounted to EUR 20.1 million (+2.7 m€, +15.6%), EBITDA to EUR 2.1 million (-1.0 m€, -32.3%) and operating profit to EUR 0.9 million (-1.3 m€, -59.5%). Gaming revenue increased 13.2% y-o-y amounting to EUR 18.8 million.

At the end of H1 2016, there were 24 Olympic casinos with 973 slot machines, 26 electronic roulette terminals, 22 gaming tables and 17 poker tournament tables operating in Estonia. As at 30 June 2016 Estonian operations employed 667 people.

Latvia

The sales revenues of Latvian segment for H1 2016 amounted to EUR 31.2 million (+5.2 m€, +19.9%), EBITDA to EUR 12.6 million (+0.8 m€, +6.7%) and operating profit to EUR 10.8 million (+0.5 m€, +4.7%). Gaming revenue increased 19.3% y‑o‑y amounting to EUR 28.6 million.

At the end of H1 2016, there were 57 Olympic casinos with 1,511 slot machines, 8 electronic roulette terminals, 19 gaming tables and 9 poker tournament tables operating in Latvia. As at 30 June 2016 Latvian operations employed 932 people.

Lithuania

The sales revenues of Lithuanian segment for H1 2016 amounted to EUR 12.3 million (+1.5 m€, +13.9%), EBITDA to EUR 0.9 million (-0.7 m€, -42.6%) and operating profit to EUR 0.1 million (-0.9 m€, -87.0%). Gaming revenue increased 14.7% y-o-y amounting to EUR 11.7 million.

At the end of H1 2016, there were 19 Olympic casinos with 536 slot machines, 8 electronic roulette terminals, 62 gaming tables and 2 poker tournament tables operating in Lithuania. As at 30 June 2016 Lithuanian operations employed 791 people.

Poland

The sales revenues of Polish segment for H1 2016 amounted to EUR 9.2 million (-4.1 m€, -30.8%), EBITDA to EUR 0.7 million (-1.0 m€, -57.6%) and operating profit to EUR 0.5 million (-0.8 m€, -60.0%). Gaming revenue decreased 30.9% y-o-y amounting to EUR 9.1 million.

At the end H1 2016, there was 1 Olympic casino with 64 slot machines, 46 electronic roulette terminals, 32 gaming tables and 4 poker tournament tables operating in Poland. As at 30 June 2016 Polish operations employed 245 people.

Slovakia

The sales revenues of Slovak segment for H1 2016 amounted to EUR 8.7 million (+0.9 m€, +11.6%), EBITDA to EUR 1.0 million (+0.9 m€, +1081.5%) and operating profit to EUR 0.4 million (+0.8 m€). Gaming revenue increased 13.3% y-o-y amounting to EUR 7.8 million.

At the end of H1 2016, there were 8 Olympic casinos with 292 slot machines, 42 electronic roulette terminals, 44 gaming tables and 21 poker tournament tables operating in Slovakia. As at 30 June 2016 Slovak operations employed 334 people.

Belarus

The sales revenues of Belarus segment for H1 2016 amounted to EUR 0.2 million (-0.3 m€, -61.9%), EBITDA to EUR -0.1 million (+0.0 m€, -2.3%) and operating loss to EUR -0.1 million (+0.0 m€, -2.1%). Gaming revenue decreased 61.5% y‑o‑y amounting to EUR 0.2 million.

At the end of H1 2016, there were 1 Olympic casinos with 33 slot machines operating in Belarus. As at 30 June 2016 Belarus operations employed 6 people.

Italy

The sales revenues of Italian segment before deducting the gaming tax of Italy for H1 2016 amounted to EUR 12.7 million (+2.1 m€, +19.6%), EBITDA to EUR 0.4 million (+0.0 m€, +4.5%) and operating profit to EUR 0.2 million (+0.1 m€, +53.2%).

At the end of H1 2016, there were 14 VLT slot casinos with 465 slot machines operating in Italy. As at 30 June 2016 Italian operations employed 78 people.

Malta

The sales revenues of Maltese segment for H1 2016 amounted to EUR 4.7 million, EBITDA to EUR -0.3 million and operating loss to EUR 0.8 million.

At the end of H1 2016, there was 1 Olympic casino with 285 slot machines, 18 electronic roulette terminals, 19 gaming tables and 10 poker tournament tables operating in Malta. As at 30 June 2016 Maltese operations employed 207 people.

 

Financial position

As at 30 June 2016, the total assets of the Group amounted to EUR 188.9 million, up 51.1% or EUR 34.4 million compared to the same period a year ago.

Current assets totalled EUR 45.1 million or 23.9% of total assets, and non-current assets EUR 143.8 million or 76.1% of total assets. The liabilities amounted to EUR 80.2 million and equity to EUR 108.7 million. The largest liabilities included dividend liabilities (22.8 m€), loans and borrowings (22.0m€), suppliers payables and advances (14.8 m€), tax liabilities (6.9 m€) and payables to employees (5.3 m€).

Investments

In H1 2016, the Group’s expenditures on property, plant and equipment totalled EUR 26.0 million (+14.1 m€, +118.5%), of which EUR 21.8 million was invested into into construction of hotel and construction and reconstruction of casinos (+13.0 m€, +147.7%) and EUR 2.5 million into new gaming equipment (-0.4 m€, -13.8%).

Cash flows

In H1 2016, the Group’s cash flows generated from operating activities amounted to EUR 14.4 million (-2.4 m€, -14.5%) and cash flows used in investing activities to EUR -31.0 million (-21.3 m€). Financing cash flows amounted to EUR 13.8 million (+29.2 m€). Net cash flows totalled EUR -2.7 million (+5.5 m€).

Staff

As at 30 June 2016 Group employed 3,260 people, up by 607 y-o-y mostly due to expansion in Estonia, Latvia and Malta.

In H1 2016, total personnel expenses amounted to EUR 26.4 million (+4.2 m€, +18.9%). In H1 2016, the members of the Management Board and Supervisory Board of all Group entities were paid remuneration and benefits including social security taxes in the amount of EUR 741 thousand (EUR 518 thousand in H1 2015) and EUR 74 thousand (EUR 74 thousand in H1 2015), respectively.

 

Consolidated statement of financial position

(in EUR thousands)   30.06.2016 31.12.2015
ASSETS      
Current assets      
Cash and cash equivalents   31,980 34,710
Financial investments   2,024 1,835
Receivables and prepayments   8,879 5,537
Prepaid income tax   567 551
Inventories   1,642 1,366
Total current assets   45,092 43,999
       
Non-current assets      
Deferred tax assets   793 801
Financial investments   4,214 3,512
Other long-term receivables and prepayments   1,016 914
Investment property   288 288
Property, plant and equipment   80,022 58,877
Intangible assets   57,508 53,942
Total non-current assets   143,841 118,334
       
TOTAL ASSETS   188,933 162,333
       
       
LIABILITIES AND EQUITY      
Current liabilities      
Borrowings   223 292
Trade and other payables   54,659 27,680
Income tax payable   219 1,058
Provisions   1,756 1,842
Total current liabilities   56,857 30,872
       
Non-current liabilities      
Borrowings   22,872 8,079
Deferred tax liability   442 513
Total non-current liabilities   23,314 8,592
       
TOTAL LIABILITIES   80,171 39,464
       
EQUITY      
Share capital   60,716 60,716
Share premium   258 258
Statutory reserve capital   4,860 3,574
Other reserves   416 329
Translation reserves   -1,322 -1,156
Retained earnings   38,277 51,822
Total equity attributable to equity holders of the parent   103,205 115,543
Non-controlling interest   5,557 7,326
TOTAL EQUITY   108,762 122,869
       
TOTAL LIABILITIES AND EQUITY   188,933 162,333

 

Consolidated statement of comprehensive income

(in EUR thousands   Q2 2016 Q2 2015 H1 2016 H1 2015
           
Income from gaming transactions   43,552 39,165 86,066 75,888
Revenue   3,070 2,432 5,909 4,822
Other income   168 190 462 275
Total revenue and income   46,790 41,787 92,437 80,985
           
Cost of materials, goods and services   -1,346 -884 -2,457 -1,776
Other operating expenses   -23,583 -19,850 -46,157 -38,421
Staff costs   -13,565 -11,409 -26,391 -22,189
Depreciation, amortisation and impairment   -2,641 -2,095 -5,104 -3,931
Other expenses   -120 -57 -294 -186
Total operating expenses   -41,255 -34,295 -80,403 -66,503
           
Operating profit   5,535 7,492 12,034 14,482
           
Interest income   8 15 47 31
Interest expense   -15 -7 -15 -14
Foreign exchange income   31 15 21 15
Other finance income and costs   -8 -2 -10 -4
Total finance income and costs   16 21 43 28
           
Profit from operating activities   5,551 7,513 12,077 14,510
           
Income tax expense   -901 -969 -1,964 -2,148
Net profit for the period   4,650 6,544 10,113 12,362
Attributable to equity holders of the parent company   4,652 6,330 9,750 11,800
Attributable to non-controlling interest   -2 214 363 562
           
           
Other comprehensive income          
Items that may be subsequently reclassified to profit or loss          
Currency translation differences   -347 -274 -166 247
Total comprehensive profit for the period   4,303 6,270 9,947 12,609
Attributable to equity holders of the parent company   4,305 6,056 9,584 12,047
Attributable to non-controlling interest   -2 214 363 562
           
           
Basic earnings per share*   3.1 4.2 6.4 7.8
Diluted earnings per share*   3.1 4.2 6.4 7.8

euro cents

 

Madis Jääger
CEO
Olympic Entertainment Group AS
Tel + 372 667 1250
E-mail 
madis.jaager@oc.eu
http://www.olympic-casino.com

 
Olympic_interim_Q2_2016_ENG.pdf 

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