Announcements

OEG: consolidated unaudited results for Q1 2017

Posted on 27.04.2017

Key performance indicators of the Group

    Q1 2017 Q1 2016 Q1 2015
Revenue before gaming taxes m€ 51.5 48.9 41.9
Gaming tax m€ -11.2 -11.3 -9.9
Net revenue m€ 40.3 37.6 32.0
Total net revenue and income m€ 40.3 37.9 32.1
EBITDA m€ 9.8 9.0 8.8
EBIT m€ 6.8 6.5 7.0
Net profit m€ 5.6 5.5 5.8
         
EBITDA margin % 24.4 23.8 27.5
Operating margin % 16.8 17.3 21.8
Net margin % 13.9 14.5 18.2
         
Assets m€ 158.4 169.9 135.5
Equity m€ 135.6 127.2 115.6
ROE % 4.7 4.3 5.1
ROA % 3.6 3.3 4.4
Current ratio times 2.4 1.4 2.8
         
Casinos at end of period # 120 124 96
Casino floor area at end of period m2 39,083 38,830 31,603
Betting points at the end of period # 31 33 0
Betting points floor area at end of period m2 838 964 0
Employees # 3,023 3,201 2,656
         
Slot machines at end of period # 4,100 4,183 3,317
Electronic roulette terminals at the end of period # 108 142 120
Gaming tables at end of period # 167 183 171
Tournament poker gaming tables at the end of period # 66 64 55

 

Key developments of the Group during Q1 of 2017:

  • The financial results in the management report section of this report have been presented together with discontinued operations Poland and Belarus, whereas in the statement of comprehensive income the results of discontinued operations have been separated and presented in a single line. Please see page 13 for the income statements of continued and discontinued operations.
  • The Group’s consolidated total revenue before gaming taxes for Q1 2017 amounted to EUR 51.5 million, up 5.3% or EUR 2.6 million y‑o‑y.
  • Total gaming revenue before gaming taxes accounted for 91.3% (47,0 m€) and other revenues for 8.7% (4.5 m€) of the Group’s consolidated total sales revenues for Q1 2017. A year before the revenue split was 94.2% (46.1 m€) and 5.8% (2.8 m€), respectively.
  • The Group’s consolidated EBITDA for Q1 2017 amounted to EUR 9.8 million, a growth of 9.6% from EUR 9.0 million a year before. The Group’s consolidated operating profit increased EUR 0.3 million (3.9%) to EUR 6.8 million.
  • The Group’s consolidated net profit attributable to equity holders of the parent company for Q1 2017 totalled EUR 6.0 million compared to EUR 5.1 million a year ago.
  • In the current financial statements, Polish and Belarus segments have been classified as discontinued operations, for which the net profit for Q1 2017 amounted to EUR 0 million (in Q1 2016 net profit of EUR 0 million).
  • Group Polish subsidiary Casino Polonia-Wrocław sp. z o.o. that operated the flagship casino of OEG in Warsaw until September 2016 submitted to the court its bankruptcy petition on 2 January 2017.
  • On 11 January 2017 Group has established and registered the company Olybet Malta Limited in Malta with share capital of EUR 5,000. Group owns through a subsidiary 100% of the shares of Olybet Malta Limited. The aim of establishing the subsidiary is to develop the legal platform for the expansion of OEG group's activities in the business of remote gambling.
  • Group Polish subsidiaries Baina Investments sp. z o.o. and Silber Investments sp. z o.o. submitted to the court their bankruptcy petitions on 20 January 2017. These holding companies own shares in the OEG subsidiary Casino Polonia-Wrocław sp. z o.o.
  • On 27 February 2017 Group announced that the Lithuanian subsidiary of OEG, UAB Orakulas will be demerged into two entities within the first half of this year. The aim of the demerger is to adjust the group structure by separating the technology platform of online operations and trading and risk management for sports betting services from the operational activities of the subsidiary. OEG will own 100% of the shares in both entities after the demerger.
  • On 28 March 2017 Group initiated proceedings for delisting its shares from the main market of the Warsaw Stock Exchange.

 

The Group’s consolidated total revenue before gaming taxes by segments:

‘000€ Q1 2017 Q1 2016 Change
Estonia 12,399 9,530 30.1%
Latvia 16,542 16,024 3.2%
Lithuania 7,032 6,288 11.8%
Slovakia 4,501 3,923 14.7%
Italy 7,915 6,287 25.9%
Malta 3,117 2,187 42.5%
Poland 0 4,573 -100.0%
Belarus 0 122 -100.0%
Total 51,506 48,934 5.3%

 

Number of casinos by segment:

  31 March 2017 31 March 2016
Estonia 24 24
Latvia 54 57
Lithuania 18 19
Slovakia 8 7
Italy 15 14
Malta 1 1
Poland 0 1
Belarus 0 1
Total 120 124

 

Overview by markets

Estonia

Total revenue before gaming taxes of Estonian segment for Q1 of 2017 amounted to EUR 12.4 million (+2.9 m€, +30.1%), EBITDA to EUR 1.4 million (+0.1 m€, +4.4%) and operating profit to EUR 0.6 million (-0.3 m€, -34.3%). Gaming revenue before gaming taxes increased 13.7% y-o-y amounting to EUR 10.3 million.

At the end of March 2017, there were 24 Olympic casinos with 988 slot machines, 38 electronic roulette terminals, 24 gaming tables and 24 poker tournament tables operating in Estonia. As at 31 March 2017 Estonian operations employed 720 people.

Latvia

Total revenue before gaming taxes of Latvian segment for Q1 of 2017 amounted to EUR 16.5 million (+0.5 m€, +3.2%), EBITDA to EUR 6.8 million (+0.0 m€, +0.2%) and operating profit to EUR 5.8 million (-0.1 m€, -2.1%). Gaming revenue before gaming taxes increased 2.8% y‑o‑y amounting to EUR 15.1 million.

At the end of March 2017, there were 54 Olympic casinos with 1,476 slot machines, 8 electronic roulette terminals, 24 gaming tables and 9 poker tournament tables operating in Latvia. As at 31 March 2017 Latvian operations employed 917 people.

Lithuania

Total revenue before gaming taxes of Lithuanian segment for Q1 of 2017 amounted to EUR 7.0 million (+0.7 m€, +11.8%), EBITDA to EUR 1.1 million (+0.6 m€, +115.4%) and operating profit to EUR 0.6 million (+0.5 m€, +503.3%). Gaming revenue before gaming taxes increased 13.6% y-o-y amounting to EUR 6.7 million.

At the end of March 2017, there were 18 Olympic casinos with 544 slot machines, 8 electronic roulette terminals, 56 gaming tables and 2 poker tournament tables and 31 betting shops operating in Lithuania. As at 31 March 2017 Lithuanian operations employed 774 people.

Slovakia

Total revenue before gaming taxes of Slovak segment for Q1 of 2017 amounted to EUR 4.5 million (+0.6 m€, +14.8%), EBITDA to EUR 0.5 million (+0.2 m€, +109.3%) and operating profit to EUR 0.2 million (+0.2 m€). Gaming revenue before gaming taxes increased 17.5% y-o-y amounting to EUR 4.0 million.

At the end of March 2017, there were 8 Olympic casinos with 268 slot machines, 36 electronic roulette terminals, 44 gaming tables and 21 poker tournament tables operating in Slovakia. As at 31 March 2017 Slovak operations employed 324 people.

Italy

Total revenue before gaming taxes of Italian segment for Q1 of 2017 amounted to EUR 7.9 million (+1.6 m€, +25.9%), EBITDA to EUR 0.6 million (+0.4 m€, +155.3%) and operating profit to EUR 0.4 million (+0.2 m€, +142.4%). Gaming revenue before gaming taxes increased 25.7% y-o-y amounting to EUR 7.8 million.

At the end of March 2017, there were 15 VLT slot casinos with 539 slot machines operating in Italy. As at 31 March 2017 Italian operations employed 88 people.

Malta

Total revenue before gaming taxes of Maltese segment for Q1 of 2017 amounted to EUR 3.1 million (+0.9 m€, +42.5%), EBITDA to EUR -0.6 million (-0.3 m€) and operating loss to EUR 0.8 million (-0.3 m€). Gaming revenue before gaming taxes increased 42.4% y-o-y amounting to EUR 3.1 million.

At the end of March 2017, there was 1 casino with 285 slot machines, 18 electronic roulette terminals, 19 gaming tables and 10 poker tournament tables operating in Malta. As at 31 March 2017 Maltese operations employed 203 people.

 

Financial position

As at 31 March 2017, the total assets of the Group amounted to EUR 158.4 million, down 6.8% or EUR 11.5 million compared to the same period a year ago.

Current assets totalled EUR 51.8 million or 32.7% of total assets, and non-current assets EUR 106.6 million or 67.3% of total assets. The liabilities amounted to EUR 22.8 million and equity to EUR 135.6 million. The largest liabilities included suppliers payables and advances (7.4 m€), tax liabilities (5.9 m€) and payables to employees (5.4 m€).

Investments

Within Q1 of 2017, the Group’s expenditures on property, plant and equipment totalled EUR 1.6 million (-7.2 m€, -81.8%), of which EUR 1.0 million was invested into construction and reconstruction of casinos and EUR 0.4 million into new gaming equipment. Q1 2016 also includes investments into the hotel construction, which is why Q1 2017 investments were lower.

Cash flows

Group’s Q1 2017 cash flows generated from operating activities amounted to EUR 10.1 million (-0.5 m€) and cash flows used in investing activities to EUR -2.5 million (+16.1 m€). Financing cash flows amounted to EUR -0.03 million (+4.9 m€). Net cash flows totalled EUR 7.6 million (+11.6 m€).

Staff

As at 31 March 2017 Group employed 3,023 people, down by 178 y-o-y mostly due to casinos´ closure in Poland and Belarus.

Within Q1 of 2017, total personnel expenses amounted to EUR 13.5 million (+0.6 m€, +4.8%). For Q1 of 2017, 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 270 thousand (EUR 372 thousand for Q1 of 2016) and EUR 37 thousand (EUR 37 thousand for Q1 of 2016), respectively.

 

Consolidated statement of financial position

(EUR thousands)   31.03.2017 31.12.2016
ASSETS      
Current assets      
Cash and cash equivalents   45,537 37,933
Financial investments   100 99
Receivables and prepayments   3,807 4,552
Prepaid income tax   711 913
Inventories   1,690 1,532
Total current assets   51,845 45,029
       
Non-current assets      
Deferred tax assets   463 426
Financial investments   5,037 4,988
Other long-term receivables and prepayments   1,020 776
Investment property   295 295
Property, plant and equipment   49,943 51,250
Intangible assets   49,810 49,932
Total non-current assets   106,568 107,667
       
TOTAL ASSETS   158,413 152,696
       
       
LIABILITIES AND EQUITY      
Current liabilities      
Trade and other payables   19,999 19,806
Income tax payable   260 292
Provisions   1,134 1,329
Total current liabilities   21,393 21,427
       
Non-current liabilities      
Deferred tax liability   698 693
Other long-term payables   729 703
Total non-current liabilities   1,427 1,396
       
TOTAL LIABILITIES   22,820 22,823
       
EQUITY      
Share capital   60,716 60,716
Share premium   258 258
Statutory reserve capital   4,860 4,860
Other reserves   605 538
Translation reserves   11 -26
Retained earnings   63,835 57,825
Total equity attributable to equity holders of the parent   130,285 124,171
Non-controlling interest   5,308 5,702
TOTAL EQUITY   135,593 129,873
       
TOTAL LIABILITIES AND EQUITY   158,413 152,696

 

Consolidated statement of comprehensive income

Summary of the income statements of continued and discontinued operations is presented on page 13 of the report.

(EUR thousands)       Q1 2017 Q1 2016
Continuing operations          
Gross gaming revenue       47,028 41,464
Other revenue       4,478 2,775
Total revenue before gaming taxes       51,506 44,239
Gaming taxes       -11,210 -9,020
Net revenue       40,296 35,219
Other income       10 165
Total net revenue and income       40,306 35,384
           
Cost of materials, goods and services       -1,462 -1,066
Other operating expenses       -15,512 -13,311
Staff costs       -13,448 -12,056
Depreciation, amortisation and impairment       -3,065 -2,374
Other expenses       -64 -112
Total operating expenses       -33,551 -28,919
           
Operating profit       6,755 6,465
           
Interest income       4 14
Interest expense       0 -1
Foreign exchange losses       -8 -8
Other finance income and costs       0 -2
Total finance income and costs       -4 3
           
Profit before income tax       6,751 6,468
           
Income tax expense       -1,135 -1,004
Net profit for the period from continuing operations       5,616 5,464
Net profit for the period from discontinued operations       0 0
           
Net profit for the period       5,616 5,464
Attributable to equity holders of the parent company       6,010 5,099
Attributable to non-controlling interest       -394 365
           
Other comprehensive income          
Items that may be subsequently reclassified to profit or loss          
Currency translation differences       37 180
Total comprehensive profit for the period       5,653 5,644
Attributable to equity holders of the parent company       6,047 5,279
Attributable to non-controlling interest       -394 365
           
           
Basic earnings per share*       4.0 3.4
From continuing operations       4.0 3.4
From discontinuing operations       0.0 0.0
           
Diluted earnings per share*       4.0 3.4
From continuing operations       4.0 3.4
From discontinuing operations       0.0 0.0

* 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_Q1_2017_ENG.pdf 

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