Announcements

OEG consolidated unaudited results for Q1 2011

Posted on 05.05.2011

Key performance indicators

Discontinued and continuing operations combined (in millions of euros)

 

  Q1 2011 Q1 2010
Revenue 31.1 26.3
EBITDA 6.3 4.4
Operating profit 0.6 0.1
Net profit / (loss) 0.2 -0.3
EBITDA margin 20.1% 16.7%
Operating margin 2.0% 0.4%
Net margin 0.6% -1.1%
Equity ratio 78.7% 73.9%
     
Number of casinos at period-end 65 67
Casino area (m2) at period-end 24,658 26,221
     
Number of slot machines at period-end 2,494 2,511
Number of gaming tables at period-end 184 200

 

Underlying formulas:

o EBITDA = earnings before financial expenses, taxes, depreciation and amortisation and impairment losses

o Operating profit = profit before financial expenses and taxes

o Net profit = net profit for the period less non-controlling interests

o EBITDA margin = EBITDA / revenue

o Operating margin = operating profit / revenue

o Net margin = net profit / revenue

o Equity ratio = equity / total assets

 

 

Overview of the Group’s key events and developments in Q1 2011:

  • The Group earned a net profit in Q1 2011 – the consolidated net profit after corporate income tax totalled 0.2 million euros in Q1 2011. In Q1 2010, the Group incurred a net loss of 0.3 million euros.
  • The efficiency of the Group’s business operations improved. In Q1 2011, the Group’s revenue totalled 31.1 million euros, i.e. 18.3% more than the revenue for Q1 2010. The number of casinos in operation declined by 2 casinos or 3% period-over-period.
  • As planned, the Group increased its market share. At Q1 2011, the Group’s market share was 53% in Estonia, 20% in Latvia and 73% in Lithuania. At Q1 2010, its market share was 52% in Estonia, 19% in Latvia and 64% in Lithuania.

 

In conjunction with the goal of increasing the efficiency of the Group’s business activities, it was decided to sell the Romanian subsidiaries, driven from the ending of licence term 1 casino was closed in Poland, as a result of all which an impairment loss was also recognised for assets in the amount 2.9 million euros.

In Q1 2011, the Group’s consolidated sales revenue totalled 29.1 million euros and the revenue totalled 31.1 million euros which is 18.3% more than the total revenue of 26.3 million euros earned in Q1 2010. The Group’s EBITDA increased by 4.4 million euros from Q1 2010 to 6.3 million euros in Q1 2011. In Q1 2011, the operating profit totalled 0.6 million euros, in Q1 2010, the operating profit totalled 0.1 million euros.

In Q1 2011, gaming operations accounted for 87% and other revenue 13% of the Group’s consolidated revenue, the respective percentages for Q1 2010 were 93% and 7%.


 

 

External revenue by segments

 

(thousands of euros) Q1 2011 Change Percentage Q1 2010 Percentage
Estonia 8,448 35.78% 27.14% 6,222 23.64%
Latvia 6,421 12.47% 20.63% 5,709 21.69%
Lithuania 4,456 11.32% 14.31% 4,003 15.21%
Poland 7,534 16.70% 24.20% 6,456 24.53%
Slovakia 2,432 16.25% 7.81% 2,092 7.95%
Belarus 879 33.99% 2.82% 656 2.49%
Romania 959 -19.14% 3.08% 1,186 4.51%
Total 31,129 18.25% 100% 26,324 100%

 

At the end of Q1 2011, the Group had 65 casinos, with the total area of 24,658 m². At the end of Q1 2010, the number of the Group’s casinos was 67, and their total area was 26,221 m².

 

Number of casinos by segment

 

  31.03.2011 31.03.2010
Estonia 17 18
Latvia 21 21
Lithuania 11 10
Poland 6 9
Slovakia 3 2
Belarus 5 5
Romania 2 2
Total 65 67

 

In Q1 2011, the Group’s consolidated operating expenses before depreciation, amortisation and impairment increased by 13.7% or 2.9 million euros as compared to the respective expenses in Q1 2010. Operating licences and gaming taxes increased the most as compared to 2010, 12.6% or 0.8 million euros, staff costs by 6.5% or 0.5 million euros and maintenance costs of gaming areas by 9.7% or 0.1 million euros.

Staff costs with social security taxes made up the largest share of the Group’s operating expenses before depreciation, amortisation and impairment losses, i.e. 7.8 million euros, followed by gaming tax expenses of 6.8 million euros, rental expenses of 2.6 million euros and marketing expenses of 2.3 million euros.

In Q1 2011, the consolidated net profit after tax totalled 0.2 million euros. In Q1 2010, the net loss after tax totalled 0.1 million euros.

 

Overview by market

Estonian segment

In Q1 2011, external revenue of the Estonian segment totalled 8.4 million euros, of which the gaming revenue 5.9 million euros and other income totalled 2.5 million euros. External revenue of the Estonian segment increased by 36.3% as compared to the previous quarter. The decline in the gaming market in Estonia was 3.5% in Q1 2011 as compared to Q1 2010. The market share of Olympic Casino Eesti AS in the Estonian gaming market was 53% at the end of Q1 2011. At the end of Q1 2010, the market share of Olympic Casino Eesti AS was 50%.

In Q1 2011, the EBITDA of the Estonian segment was 2.9 million euros and the operating profit was 1.8 million euros. In Q1 2010, the EBITDA of the Estonian segment totalled 0.9 million euros and the operating loss totalled 0.3 million euros.

At the end of Q1 2011, there were 17 Olympic casinos with 699 slot machines and 19 gaming tables in operation in Estonia.

 

Latvian segment

In Q1 2011, external revenue of the Latvian segment totalled 6.4 million euros, of which the gaming revenue 5.9 million euros and other income totalled 0.5 million euros. External revenue of the Latvian segment increased by 12.3% as compared to the previous quarter. The increase in the gaming market in Latvia was 13.5% in Q1 2011 as compared to Q1 2010. The market share of Olympic Casino Latvia SIA in the Latvian gaming market was 20% at the end of Q1 2011. At the end of Q1 2010, the market share of Olympic Casino Latvia SIA was 19%.

In Q1 2011, the EBITDA of the Latvian segment was 2.4 million euros and the operating profit was 1.4 million euros. In Q1 2010, the EBITDA of the Latvian segment totalled 1.9 million euros and the operating profit totalled 0.9 million euros.

At the end of Q1 2011, there were 21 Olympic casinos with 647 slot machines and 24 gaming tables in operation in Latvia.

 

Lithuanian segment

In Q1 2011, external revenue of the Lithuanian segment totalled 4.5 million euros, of which the gaming revenue 4.1 million euros and other income totalled 0.4 million euros. External revenue of the Lithuanian segment increased by 12.5% as compared to the previous quarter. The decline in the gaming market in Lithuania was 2% in Q1 2011 as compared to Q1 2010. The market share of Olympic Casino Group Baltija UAB in the Lithuanian gaming market was 73% at the end of Q1 2011. At the end of Q1 2010, the market share of Olympic Casino Group Baltija UAB was 64%.

In Q1 2011, the EBITDA of the Lithuanian segment was 0.9 million euros and the operating profit was 0.4 million euros. In Q1 2010, the EBITDA of the Lithuanian segment totalled 0.4 million euros and the operating loss totalled 0.2 million euros.

At the end of Q1 2011, there were 11 Olympic casinos with 376 slot machines and 52 gaming tables in operation in Lithuania.

 

Polish segment

In Q1 2011, external revenue of the Polish segment totalled 7.5 million euros, of which the gaming revenue 7.4 million euros and other income totalled 0.1 million euros. External revenue of the Polish segment increased by 15.8% as compared to the previous quarter.

In Q1 2011, the EBITDA of the Polish segment was 1.1 million euros and the operating loss was 0.1 million euros. The operating loss includes the impairment losses related to the closing of one casino in the amount of 0.4 million euros. In Q1 2010, the EBITDA of the Polish segment totalled 0.6 million euros and the operating loss totalled 0.3 million euros.

At the end of Q1 2011, there were 6 Olympic casinos with 309 slot machines and 42 gaming tables in operation in Poland.

 

Slovak segment

In Q1 2011, external revenue of the Slovak segment totalled 2.4 million euros, of which the gaming revenue 2.2 million euros and other income totalled 0.2 million euros. External revenue of the Slovak segment increased by 16.3% as compared to the previous quarter.

In Q1 2011, the EBITDA of the Slovak segment was 0.4 million euros and the operating profit was 0.1 million euros. In Q1 2010, the EBITDA of the Slovak segment totalled 0.4 million euros and the operating profit totalled 0.1 million euros.

At the end of Q1 2011, there were 3 Olympic casinos with 144 slot machines and 30 gaming tables in operation in Slovakia.

 

Belarusian segment

In Q1 2011, external revenue of the Belarusian totalled 0.9 million euros, of which the gaming revenue 0.8 million euros and other income totalled 0.1 million euros. External revenue of the Belarusian segment increased by 33.8% as compared to the previous quarter.

In Q1 2011, the EBITDA of the Belarusian segment was 0.3 million euros and the operating loss was 0.1 million euros. In Q1 2010, the EBITDA of the Belarusian segment totalled 0.1 million euros and the operating loss totalled 0.1 million euros.

At the end of Q1 2011, there were 5 Olympic casinos with 240 slot machines in operation in Belarus.

 

Romanian segment

In Q1 2011, external revenue of the Romanian totalled 1.0 million euros, of which the gaming revenue 0.8 million euros and other income totalled 0.2 million euros. External revenue of the Romanian segment declined by 18.8% as compared to the previous quarter.

In Q1 2011, the EBITDA of the Romanian segment was -1.6 million euros and the operating loss was 3.1 million euros. The operating loss includes the impairment losses related to the sale of Romanian subsidiaries in the amount of 2.5 million euros (see note 9 in the interim financial statements). In Q1 2010, the EBITDA of the Romanian segment totalled 0.0 million euros and the operating loss totalled 0.2 million euros.

At the end of Q1 2011, there were 2 Olympic casinos with 79 slot machines and 13 gaming tables in operation in Romania.


 

 

Financial position

At 31 March 2011, the consolidated balance sheet total of the Group was 105.8 million euros (31 March 2010: 107.7 million euros). The balance sheet total decreased by 1.8% in a quarter, primarily related to the impairment of assets.

Current assets accounted for 45.3 million euros or 42.8% of total assets and non-current assets for 60.5 million euros or 57.2% of total assets. Intangible assets accounted for 28.8 million euros or 47.6% of non-current assets.

At the balance sheet date, consolidated liabilities totalled 21.1 million euros and the consolidated equity amounted to 84.7 million euros. The largest liability items included borrowings of 8.5 million euros, tax liabilities of 4.7 million euros and payables to employees of 3.1 million euros.

 

Investments

In Q1 2011, the Group’s expenditures on property, plant and equipment totalled 0.4 million euros, of which 0.2 million euros was spent on reconstruction of casinos and 0.1 million euros was spent on new gaming equipment. In Q1 2011, expenditures on intangible assets totalled 0.02 million euros.

In Q1 2010, total expenditures on property, plant and equipment, and intangible assets were 1.6 million euros.

 

Cash flows

In Q1 2011, the Group’s cash flows from operating activities were 7.3 million euros. Cash flows used in investing activities totalled -0.5 million euros and cash flows used in financing activities totalled -0.8 million euros. Net cash flows totalled 6.1 million euros.

In Q1 2010, the Group’s cash flows from operating activities were 3.1 million euros. Cash flows from investing activities totalled 2.6 million euros and cash flows used in financing activities totalled -1.2 million euros. Net cash flows totalled 4.6 million euros.

 

Staff

At 31 March 2011, the Group employed 2,156 people (31 December 2010: 2,115): 461 in Estonia, 441 in Latvia, 518 in Lithuania, 337 in Poland, 161 in Slovakia, 94 in Belarus and 144 in Romania.

In Q1 2011, employee wages and salaries including social security taxes in the Group amounted to 7.8 million euros (Q1 2010: 7.3 million euros). In Q1 2011, the remuneration and benefits of the Group’s Supervisory and Management Board including social security taxes totalled 0.08 million euros (Q1 2010: 0.08 million euros.

 

 

Consolidated statement of financial position (in thousands of euros)

      31.03.2011 31.12.2010
ASSETS      
Current assets      
Cash and cash equivalents   35,045 28,960
Financial investments   3,892 3,937
Receivables and prepayments   3,955 4,959
Prepaid income tax   573 734
Inventories   986 1,416
Non-current assets held for sale   807 1,105
Total current assets   45,258 41,111
       
Non-current assets      
Deferred tax assets   1,085 1,098
Financial investments   931 927
Other long-term receivables   976 949
Investment property     1,414 1,414
Property, plant and equipment     27,332 33,135
Intangible assets     28,777 29,062
Total non-current assets   60,515 66,585
       
TOTAL ASSETS   105,773 107,696
       
       
LIABILITIES AND EQUITY      
Current liabilities      
Borrowings     3,109 3,109
Trade and other payables   10,082 10,782
Income tax payable   1,205 833
Provisions   961 1,694
Total current liabilities   15,357 16,418
       
Non-current liabilities      
Deferred tax liability   252 313
Borrowings     5,453 6,231
Total non-current liabilities   5,705 6,544
       
TOTAL LIABILITIES   21,062 22,962
       
EQUITY      
Share capital   96,717 96,717
Share premium   14,535 14,535
Statutory reserve capital   2,413 2,413
Translation reserves   514 740
Accumulated losses   -33,520 -33,703
Total equity attributable to equity holders of the parent   80,659 80,702
Non-controlling interest   4,052 4,032
TOTAL EQUITY   84,711 84,734
       
TOTAL LIABILITIES AND EQUITY   105,773 107,696

 

 

Consolidated statement of comprehensive income (in thousands of euros)

      Q1 2011 Q1 2010
       
Income from gaming transactions   27,183 24,469
Revenue   1,910 1,672
Other income   2,036 183
Total revenue and income   31,129 26,324
       
Cost of materials, goods and services   -672 -602
Other operating expenses   -14,837 -13,980
Staff costs   -7,777 -7,306
Depreciation, amortisation and impairment     -5,629 -4,294
Other expenses   -1,580 -40
Total operating expenses   -30,495 -26,222
       
Operating profit   634 102
       
Interest income   75 65
Interest expense   -126 -234
Foreign exchange gains (losses)   25 -17
Other finance income and costs   -2 -2
Total finance income and costs   -28 -188
       
Profit (loss) from operating activities   606 -86
       
Income tax expense   -403 -14
Net profit (loss) for the period   203 -100
Attributable to equity holders of the parent company   183 -343
Attributable to non-controlling interest   20 243
       
       
Other comprehensive income (loss)      
Currency translation differences   -226 1,468
Total comprehensive profit (loss) for the period   -23 1,368
Attributable to equity holders of the parent company   -43 1,125
Attributable to non-controlling interest   20 243
       
       
Basic earnings (loss) per share (euro cent) 6 0.1 -0.2
Diluted earnings (loss) per share (euro cent) 6 0.1 -0.2

 

 

Additional information:

Madis Jääger
CFO, member of the Board
Olympic Entertainment Group
Ph: + 372 667 1250
E-mail: madis.jaager@oc.eu
http://www.olympic-casino.com


Olympic_interim_Q1_2011_ENG.pdf

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