Announcements

Consolidated unaudited results for Q3 and 9m 2016

Posted on 25.10.2016

Key performance indicators of the Group

    9M 2016 9M 2015 9M 2014
Revenues m€ 160.4 121.0 110.4
Gaming tax m€ 25.7 22.3 21.2
EBITDA m€ 44.2 29.2 27.1
EBIT m€ 27.7 23.3 20.8
Net profit m€ 23.7 19.6 17.2
EBITDA margin % 27.6 24.1 24.5
Operating margin % 17.3 19.2 18.8
Net margin % 14.8 16.2 15.6
         
Assets m€ 153.7 135.3 120.7
Equity m€ 123.8 115.0 105.0
ROE % 20.3 18.8 18.2
ROA % 15.0 15.3 15.0
Current ratio times 1.7 2.5 2.9
         
Casinos at end of period # 123 97 97
Casino floor area at end of period m2 38,435 30,343 32,119
Betting points at the end of period # 32 0 0
Betting points floor area at end of period m2 900 0 0
Employees # 3,069 2,636 2,621
         
Slot machines at end of period # 4,137 3,372 3,432
Electronic roulette terminals at the end of period # 112 104 96
Gaming tables at end of period # 164 185 191
Tournament poker gaming tables at the end of period # 64 46 46

 

Key developments of the Group during the 9 months of 2016:

  • The Group’s consolidated sales revenues for 9 months of 2016 amounted to EUR 142.1 million, up 17.8% or EUR 21.4 million y‑o‑y.
  • Gaming revenues accounted for 92.6% (131.5 m€) and other revenues for 7.4% (10.6 m€) of the Group’s consolidated sales revenues for 9 months of 2016. A year before the revenue split was 93.9% (113.3 m€) and 6.1% (7.3 m€), respectively.
  • The Group’s consolidated EBITDA for 9 months of 2016 amounted to EUR 44.2 million, a growth of 51.4% from EUR 29.2 million a year before. The Group’s consolidated operating profit increased EUR 4.5 million (19.3%) to EUR 27.7 million.
  • The Group’s consolidated net profit attributable to equity holders of the parent company for 9 months of 2016 totalled EUR 23.7 million compared to EUR 19.6 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 was paid out to shareholders on 14 October 2016.
  • On 15 July 2016 Group company Jessy Investments B.V. entered into an agreement to divest the 100% holding in its Estonian subsidiary Kesklinna Hotelli OÜ that owns the hotel and entertainment complex building in Tallinn, where the Hilton Tallinn Park hotel and the flagship casino of OEG group, Olympic Park Casino, are based in. The buyer was East Capital group company ECB3 Tallinn OÜ. The transaction price was 48 million euros and profit 17.8 million euros. The aim of the sales transaction was to release capital that has been invested into real estate and to focus on the core business of the group – operating casino and entertainment complexes. The hotel and casino operations that are in the building were not part of the sales transaction and will continue to be owned by the Group.
  • On 23 September 2016 the Group announced that it is forced to freeze active operations in Poland from 24 September 2016 due to the lack of valid location specific activity license, but remains to be interested in continuing its operations in the Polish market and plans to participate in the upcoming public tenders for the licenses. The main purpose of freezing the active operations is to minimise the everyday costs and expenses.
  • On 23 September 2016 the Group announced of its decision to exit Belarus gaming market due to the inefficient operations caused by the macroeconomic situation and poor prospects to increase profitability in Belarus.

 

The Group’s consolidated sales revenues by segments:

‘000€ Q3 2016 Q3 2015 Change 9M 2016 9M 2015 Change
Estonia 12,319 8,804 39.9% 32,441 26,216 23.7%
Latvia 17,034 14,598 16.7% 48,263 40,651 18.7%
Lithuania 6,038 5,190 16.3% 18,330 15,979 14.7%
Poland 4,300 4,745 -9.4% 13,530 18,084 -25.2%
Slovakia 3,966 3,921 1.2% 12,679 11,726 8.1%
Belarus 0 169 -100.0% 186 656 -71.7%
Italy 2,748 2,506 9.7% 8,213 7,331 12.0%
Malta 3,699 0 N/A 8,437 0 N/A
Total 50,104 39,933 25.5% 142,079 120,643 17.8%

 

Number of casinos by segment:

  30 September 2016 30 September 2015
Estonia 24 20
Latvia 57 37
Lithuania 18 18
Poland 0 1
Slovakia 8 7
Belarus 0 2
Italy 15 12
Malta 1 0
Total 123 97

 

The Group’s consolidated operating expenses for 9 months of 2016 amounted to EUR 132.7 million, up 35.7% or EUR 34.9 million y‑o‑y. The growth was highest in amortisation and depreciation costs largely due to impairment of goodwill and assets in Poland (+10.5 m€, +177.0%), personnel expenses (+7.9 m€, +24.6%), gaming tax (+3.4 m€, +15.1%), marketing expenses (+2.8 m€, +36.2%) and rent expenses (+2.2 m€, +23.4%). Personnel expenses (40.2 m€) and gaming tax (25.7 m€) represented the largest cost items accounting for 49.6% of total operating expenses.

 

Overview by markets

Estonia

The sales revenues of Estonian segment for 9 months of 2016 amounted to EUR 32.4 million (+6.2 m€, +23.7%), EBITDA to EUR 21.6 million (+17.1 m€, +374.3%) and operating profit to EUR 19.0 million (+15.9 m€, +507.8%). Gaming revenue increased 15.5% y-o-y amounting to EUR 28.8 million. Sales revenues increased partially due to hotel sales revenues. EBITDA and operating profit increased largely due to the profit from the hotel real estate sales transaction in amount of EUR 17.8 million.

At the end of Q3 2016, there were 24 Olympic casinos with 990 slot machines, 36 electronic roulette terminals, 24 gaming tables and 22 poker tournament tables operating in Estonia. As at 30 September 2016 Estonian operations employed 698 people.

Latvia

The sales revenues of Latvian segment for 9 months of 2016 amounted to EUR 48.3 million (+7.6 m€, +18.7%), EBITDA to EUR 20.0 million (+0.6 m€, +3.2%) and operating profit to EUR 17.3 million (+0.1 m€, +0.9%). Gaming revenue increased 18.1% y‑o‑y amounting to EUR 44.2 million.

At the end of Q3 2016, there were 57 Olympic casinos with 1,497 slot machines, 8 electronic roulette terminals, 19 gaming tables and 9 poker tournament tables operating in Latvia. As at 30 September 2016 Latvian operations employed 941 people.

Lithuania

The sales revenues of Lithuanian segment for 9 months of 2016 amounted to EUR 18.3 million (+2.4 m€, +14.7%), EBITDA to EUR 1.5 million (-1.0 m€, -40.2%) and operating profit to EUR 0.3 million (-1.3 m€, -81.9%). Gaming revenue increased 15.5% y-o-y amounting to EUR 17.4 million.

At the end of Q3 2016, there were 18 Olympic casinos with 534 slot machines, 8 electronic roulette terminals, 58 gaming tables and 2 poker tournament tables and 32 betting shops operating in Lithuania. As at 30 September 2016 Lithuanian operations employed 780 people.

Poland

The sales revenues of Polish segment for 9 months of 2016 amounted to EUR 13.5 million (-4.6 m€, -25.2%), EBITDA to EUR ‑0.6 million (-2.9 m€, -124.8%) and operating loss to EUR 8.8 million (-10.7 m€, -577.7%). Gaming revenue decreased 25.3% y-o-y amounting to EUR 13.3 million. Operating loss was caused by the impairment of goodwill and assets due to freezing active operations.

Polish flagship casino was closed on 23 September 2016 due to expiration of location specific activity license. As at 30 September 2016 Polish operations employed 39 people.

Slovakia

The sales revenues of Slovak segment for 9 months of 2016 amounted to EUR 12.7 million (+1.0 m€, +8.1%), EBITDA to EUR 1.2 million (+0.8 m€, +188.8%) and operating profit to EUR 0.3 million (+0.7 m€). Gaming revenue increased 9.4% y-o-y amounting to EUR 11.3 million.

At the end of Q3 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 September 2016 Slovak operations employed 312 people.

Belarus

The sales revenues of Belarus segment for 9 months of 2016 amounted to EUR 0.2 million (-0.5 m€, -71.7%), EBITDA to EUR -0.2 million (+0.1 m€) and operating loss to EUR 0.2 million (+0.1 m€). As at 30 September 2016 Belarus operations employed 6 people.

The Group has announced of its decision to exit Belarus gaming market due to the inefficient operations caused by the macroeconomic situation and poor prospects to increase profitability in Belarus.

Italy

The sales revenues of Italian segment before deducting the gaming tax of Italy for 9 months of 2016 amounted to EUR 18.8 million (+2.9 m€, +18.4%), EBITDA to EUR 0.5 million (+0.1 m€, +16.5%) and operating profit to EUR 0.3 million (+0.2 m€, +123.7%).

At the end of Q3 2016, there were 15 VLT slot casinos with 539 slot machines operating in Italy. As at 30 September 2016 Italian operations employed 82 people.

Malta

The sales revenues of Maltese segment for 9 months of 2016 amounted to EUR 8.4 million, EBITDA to EUR 0.3 million and operating loss to EUR 0.5 million.

At the end of September 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 September 2016 Maltese operations employed 211 people.

 

Financial position

As at 30 September 2016, the total assets of the Group amounted to EUR 153.7 million, up 13.6% or EUR 18.4 million compared to the same period a year ago.

Current assets totalled EUR 48.3 million or 31.4% of total assets, and non-current assets EUR 105.4 million or 68.6% of total assets. The liabilities amounted to EUR 29.9 million and equity to EUR 123.8 million. The largest liabilities included dividend liabilities (7.6 m€), suppliers payables and advances (6.6 m€), tax liabilities (5.5 m€) and payables to employees (5.2 m€).

Investments

Within 9 months of 2016, the Group’s expenditures on property, plant and equipment totalled EUR 28.5 million (+9.8 m€, +52.5%), of which EUR 24.4 million was invested into construction of hotel and construction and reconstruction of casinos (+10.0 m€, +69.2%) and EUR 3.2 million into new gaming equipment (-0.7 m€, -16.9%).

Cash flows

Group’s 2016 9 months cash flows generated from operating activities amounted to EUR 26.0 million (+0.4 m€) and cash flows used in investing activities to EUR -22.1 million (-6.2 m€). Financing cash flows amounted to EUR 1.6 million (+15.1 m€). Net cash flows totalled EUR 5.5 million (+9.2 m€).

Staff

As at 30 September 2016 Group employed 3,069 people, up by 433 y-o-y mostly due to expansion in Estonia, Latvia and Malta.

Within the first 9 months of 2016, total personnel expenses amounted to EUR 40.2 million (+7.9 m€, +24.6%). For the first 9 months of 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 1,032 thousand (EUR 620 thousand for 9 months of 2015) and EUR 111 thousand (EUR 111 thousand for 9 months of 2015), respectively.

 

Consolidated statement of financial position

(in EUR thousands)   30.09.2016 31.12.2015
ASSETS      
Current assets      
Cash and cash equivalents   40,202 34,710
Financial investments   880 1,835
Receivables and prepayments   4,956 5,537
Prepaid income tax   631 551
Inventories   1,618 1,366
Total current assets   48,287 43,999
       
Non-current assets      
Deferred tax assets   423 801
Financial investments   4,208 3,512
Other long-term receivables and prepayments   944 914
Investment property   288 288
Property, plant and equipment   49,482 58,877
Intangible assets   50,094 53,942
Total non-current assets   105,439 118,334
       
TOTAL ASSETS   153,726 162,333
       
       
LIABILITIES AND EQUITY      
Current liabilities      
Borrowings   0 292
Trade and other payables   26,457 27,680
Income tax payable   201 1,058
Provisions   2,046 1,842
Total current liabilities   28,704 30,872
       
Non-current liabilities      
Borrowings   722 8,079
Deferred tax liability   460 513
Total non-current liabilities   1,182 8,592
       
TOTAL LIABILITIES   29,886 39,464
       
EQUITY      
Share capital   60,716 60,716
Share premium   258 258
Statutory reserve capital   4,860 3,574
Other reserves   470 329
Translation reserves   -703 -1,156
Retained earnings   52,189 51,822
Total equity attributable to equity holders of the parent   117,790 115,543
Non-controlling interest   6,050 7,326
TOTAL EQUITY   123,840 122,869
       
TOTAL LIABILITIES AND EQUITY   153,726 162,333

 

Consolidated statement of comprehensive income

(in EUR thousands)   Q3 2016 Q3 2015 9M 2016 9M 2015
           
Income from gaming transactions   45,454 37,431 131,521 113,319
Revenue   4,650 2,502 10,558 7,324
Other income   17,889 113 18,351 388
Total revenue and income   67,993 40,046 160,430 121,031
           
Cost of materials, goods and services   -1,485 -913 -3,942 -2,690
Other operating expenses   -23,959 -18,174 -70,115 -56,595
Staff costs   -13,769 -10,032 -40,160 -32,220
Depreciation, amortisation and impairment   -11,390 -2,024 -16,494 -5,955
Other expenses   -1,679 -122 -1,973 -308
Total operating expenses   -52,282 -31,265 -132,684 -97,768
           
Operating profit   15,711 8,781 27,746 23,263
           
Interest income   11 10 58 41
Interest expense   -25 -7 -41 -21
Foreign exchange income   5 5 26 20
Other finance income and costs   -20 -1 -30 -5
Total finance income and costs   -29 7 13 35
           
Profit from operating activities   15,682 8,788 27,759 23,298
           
Income tax expense   -1,278 -748 -3,241 -2,896
Net profit for the period   14,404 8,040 24,518 20,402
Attributable to equity holders of the parent company   13,910 7,804 23,661 19,604
Attributable to non-controlling interest   494 236 857 798
           
           
Other comprehensive income          
Items that may be subsequently reclassified to profit or loss          
Currency translation differences   618 -29 453 218
Total comprehensive profit for the period   15,022 8,011 24,971 20,620
Attributable to equity holders of the parent company   14,528 7,775 24,114 19,822
Attributable to non-controlling interest   494 236 857 798
           
           
Basic earnings per share*   9.2 5.1 15.6 12.9
Diluted earnings per share*   9.2 5.1 15.6 12.9

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_Q3_2016_ENG.pdf 

« Back to list