Announcements

OEG consolidated unaudited results for Q2 and 6 months 2011

Posted on 04.08.2011

Key performance indicators

Discontinued and continuing operations combined (in millions of euros)

 

  6m 2011 6m 2010
Revenue 61.9 52.9
EBITDA 15.0 8.7
Operating profit 5.7 -0.6
Net profit / (loss) 4.4 -1.2
EBITDA margin 24.2% 16.4%
Operating margin 9.2% -1.1%
Net margin 7.1% -2.3%
Equity ratio 68.0% 77.6%
     
Number of casinos at period-end 63 64
Casino area (m2) at period-end 23,076 25,409
     
Number of slot machines at period-end 2,441 2,475
Number of gaming tables at period-end 173 168

 

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 H1 2011:

  • In Q2 2011 the consolidated net profit after corporate income tax for the Group totalled 4.2 million euros. In Q2 2010, the Group incurred a net loss of 0.8 million euros.
  • The efficiency of the Group’s business operations improved. In Q2 2011, the Group’s income from gaming transactions and revenues totalled 28.7 million euros, i.e. 7.9% more than for Q2 2010. The number of casinos in operation declined by 1 casinos or 1.5% period-over-period.
  • As planned, the Group increased its market share. At Q2 2011, the Group’s market share was 55.2% in Estonia, 20.3% in Latvia and 70.5% in Lithuania. At Q2 2010, its market share was 51.5% in Estonia, 19% in Latvia and 62% in Lithuania.
  • Olympic Entertainment Group AS signed share purchase agreement on 30 April 2011 with an Israeli entrepreneur for selling all the shares in Romanian subsidiaries Olympic Casino Bucharest S.R.L, Muntenia Food and Beverage S.R.L. and Olympic Exchange S.R.L. As of 30 June 2011 shares of Romanian subsidiaries have been registered to the buyer.
  • On 27 May 2011, the decrease of share capital and the conversion of share capital of Olympic Entertainment Group AS into euros were entered into the Commercial Register based on the resolutions adopted by the General Meeting of Shareholders of the Company held on 5 May 2011. The new amount of the registered share capital of the Company is 90,797,703 euros, which is divided into 151,329,505 ordinary shares with the nominal value of 0.6 euros. According to the resolutions of the General Meeting of Shareholders held on 5 May 2011, the share capital of the Company will be further reduced by 9,079,770.30 euros from 90,797,703 euros to 81,717,932.70 euros by reducing the calculated value of the shares. The referred resolution entered into force on the day following to the day, when the reduction of the share capital in relation to the conversion into euros and the amendment of the Articles of Association were entered into the Commercial Register, (i.e. on 28 May 2011) pursuant to the resolutions of the General Meeting.

 

In H1 2011, the Group’s consolidated sales revenue totalled 57.8 million euros and the revenue totalled 61.9 million euros which is 17.0% more than the total revenue of 52.9 million euros earned in H1 2010. The Group’s EBITDA increased by 8.7 million euros from H1 2010 to15.0 million euros in H1 2011. In H1 2011, the operating profit totalled 5.7 million euros, in H1 2010, the operating loss totalled 0.6 million euros.

In H1 2011, gaming operations accounted for 87% and other revenue 13% of the Group’s consolidated revenue, the respective percentages for H1 2010 were 93% and 7%.
 

External sales revenue by segments, continuing operations

 

(thousands of euros) Q2 2011 Change Percentage Q2 2010 Percentage
Estonia 7,218 10.2% 25.1% 6,549 24.9%
Latvia 6,865 23.4% 23.9% 5,562 21.2%
Lithuania 4,341 -3.8% 15.1% 4,514 17.2%
Poland 6,458 -5.2% 22.5% 6,811 25.9%
Slovakia 3,067 49.2% 10.7% 2,056 7.8%
Belarus 782 4.3% 2.7% 749 2.9%
Total 28,731 9.5% 100.0% 26,241 100.0%

 

 

(thousands of euros) 6m 2011 Change Percentage 6m 2010 Percentage
Estonia 13,708 8.0% 24.1% 12,695 24.8%
Latvia 13,276 18.1% 23.3% 11,243 21.9%
Lithuania 8,757 2.8% 15.4% 8,517 16.6%
Poland 13,981 5.5% 24.6% 13,246 25.9%
Slovakia 5,499 32.6% 9.7% 4,148 8.1%
Belarus 1,660 19.1% 2.9% 1,393 2.7%
Total 56,881 11.0% 100.0% 51,242 100.0%

 

At the end of Q2 2011, the Group had 63 casinos, with the total area of 23,076 m². At the end of Q2 2010, the number of the Group’s casinos was 64, and their total area was 25,409 m².

 

Number of casinos by segment

 

  30.06.2011 30.06.2010
Estonia 17 17
Latvia 21 21
Lithuania 11 10
Poland 6 7
Slovakia 3 2
Belarus 5 5
Romania 0 2
Total 63 64

 

In H1 2011, the Group’s consolidated operating expenses before depreciation, amortisation and impairment increased by 6.1% or 2.7 million euros as compared to the respective expenses in H1 2010. Operating licences and gaming taxes increased the most as compared to 2010, 6.3% or 0.8 million euros, staff costs by 2.7% or 0.4 million euros and maintenance costs of gaming areas by 13.5% or 0.3 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. 15.1 million euros, followed by gaming tax expenses of 13.1 million euros, rental expenses of 4.9 million euros and marketing expenses of 4.4 million euros.

In H1 2011, the consolidated net profit after tax totalled 4.4 million euros. In H1 2010, the net loss after tax totalled 1.1 million euros.

 

Overview by market

Estonian segment

In H1 2011, external revenue of the Estonian segment totalled 15.7 million euros, of which the gaming revenue 12.4 million euros and other income totalled 3.3 million euros. External revenue of the Estonian segment increased by 22.0% as compared to H1 2010. The increase in the gaming market in Estonia was 0.1% in H1 2011 as compared to H1 2010. The market share of Olympic Casino Eesti AS in the Estonian gaming market was 55.2% at the end of H1 2011. At the end of H1 2010, the market share of Olympic Casino Eesti AS was 51.5%.

In H1 2011, the EBITDA of the Estonian segment was 4.3 million euros and the operating profit was 2.3 million euros. In H1 2010, the EBITDA of the Estonian segment totalled 2.1 million euros and the operating loss totalled 0.2 million euros.

At the end of H1 2011, there were 17 Olympic casinos with 698 slot machines and 20 gaming tables in operation in Estonia.

 

Latvian segment

In H1 2011, external revenue of the Latvian segment totalled 13.3 million euros, of which the gaming revenue 12.2 million euros and other income totalled 1.1 million euros. External revenue of the Latvian segment increased by 17.7% as compared to H1 2010. The increase in the gaming market in Latvia was 14.6% in H1 2011 as compared to H1 2010. The market share of Olympic Casino Latvia SIA in the Latvian gaming market was 20.3% at the end of H1 2011. At the end of H1 2010, the market share of Olympic Casino Latvia SIA was 19%.

In H1 2011, the EBITDA of the Latvian segment was 5.0 million euros and the operating profit was 3.3 million euros. In H1 2010, the EBITDA of the Latvian segment totalled 3.6 million euros and the operating profit totalled 1.5 million euros.

At the end of H1 2011, there were 21 Olympic casinos with 646 slot machines and 24 gaming tables in operation in Latvia.

 

Lithuanian segment

In H1 2011, external revenue of the Lithuanian segment totalled 8.8 million euros, of which the gaming revenue 8.2 million euros and other income totalled 0.6 million euros. External revenue of the Lithuanian segment increased by 3.5% as compared to H1 2010. The decline in the gaming market in Lithuania was 4.3% in H1 2011 as compared to H1 2010. The market share of Olympic Casino Group Baltija UAB in the Lithuanian gaming market was 70.5% at the end of H1 2011. At the end of H1 2010, the market share of Olympic Casino Group Baltija UAB was 62%.

In H1 2011, the EBITDA of the Lithuanian segment was 1.8 million euros and the operating profit was 0.8 million euros. In H1 2010, the EBITDA of the Lithuanian segment totalled 1.5 million euros and the operating profit totalled 0.3 million euros.

At the end of H1 2011, there were 11 Olympic casinos with 376 slot machines and 52 gaming tables in operation in Lithuania.

 

Polish segment

In H1 2011, external revenue of the Polish segment totalled 16.0 million euros, of which the gaming revenue 13.7 million euros and other income totalled 2.3 million euros. External revenue of the Polish segment increased by 20.3% as compared to H1 2010.

In H1 2011, the EBITDA of the Polish segment was 3.3 million euros and the operating profit was 1.2 million euros. In H1 2010, the EBITDA of the Polish segment totalled 1.4 million euros and the operating loss totalled 1.0 million euros.

At the end of H1 2011, there were 6 Olympic casinos with 344 slot machines and 46 gaming tables in operation in Poland.

 

Slovak segment

In H1 2011, external revenue of the Slovak segment totalled 5.5 million euros, of which the gaming revenue 5.0 million euros and other income totalled 0.5 million euros. External revenue of the Slovak segment increased by 32.5% as compared to H1 2010.

In H1 2011, the EBITDA of the Slovak segment was 1.1 million euros and the operating profit was 0.6 million euros. In H1 2010, the EBITDA of the Slovak segment totalled 0.8 million euros and the operating profit totalled 0.3 million euros.

At the end of H1 2011, there were 3 Olympic casinos with 144 slot machines and 31 gaming tables in operation in Slovakia.

 

Belarusian segment

In H1 2011, external revenue of the Belarusian totalled 1.7 million euros, of which the gaming revenue 1.5 million euros and other income totalled 0.2 million euros. External revenue of the Belarusian segment increased by 21.4% as compared to H1 2010.

In H1 2011, the EBITDA of the Belarusian segment was 0.3 million euros and the operating loss was 0.0 million euros. In H1 2010, the EBITDA of the Belarusian segment totalled 0.3 million euros and the operating loss totalled 0.1 million euros.

At the end of H1 2011, there were 5 Olympic casinos with 233 slot machines in operation in Belarus.

 

Romanian segment

Olympic Entertainment Group AS signed share purchase agreement on 30 April 2011 with an Israeli entrepreneur for selling all the shares in Romanian subsidiaries Olympic Casino Bucharest S.R.L, Muntenia Food and Beverage S.R.L. and Olympic Exchange S.R.L. As of 30 June 2011 shares of Romanian subsidiaries have been registered to the buyer.

In H1 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 28.6% as compared to H1 2010.

In H1 2011, the EBITDA of the Romanian segment was -1.0 million euros and the operating loss was 2.4 million euros. In H1 2010, the EBITDA of the Romanian segment totalled -1.0 million euros and the operating loss totalled 1.5 million euros.

 

Financial position

At 30 June 2011, the consolidated balance sheet total of the Group was 108.2 million euros (31 December 2010: 107.7 million euros). The balance sheet total increased by 0.5% in a half-year.

Current assets accounted for 51.4 million euros or 47.5% of total assets and non-current assets for 56.8 million euros or 52.5% of total assets. Intangible assets accounted for 28.7 million euros or 50.5% of non-current assets.

At the balance sheet date, consolidated liabilities totalled 34.6 million euros and the consolidated equity amounted to 73.6 million euros. The largest liability items included the reduction of share capital liability of 15.0 million euros, borrowings of 7.8 million euros, tax liabilities of 4.3 million euros and payables to employees of 2.8 million euros.

 

Investments

In H1 2011, the Group’s expenditures on property, plant and equipment totalled 0.9 million euros, of which 0.2 million euros was spent on reconstruction of casinos, 0.4 million euros was spent on new gaming equipment and 0.2 million euros was spent on other property, plant and equipment.

In H1 2010, total expenditures on property, plant and equipment, and intangible assets were 2.7 million euros.

 

Cash flows

In H1 2011, the Group’s cash flows from operating activities were 14.2 million euros. Cash flows used in investing activities totalled 0.8 million euros and cash flows used in financing activities totalled 1.6 million euros. Net cash flows totalled 11.9 million euros.

In H1 2010, the Group’s cash flows from operating activities were 7.0 million euros. Cash flows from investing activities totalled 2.4 million euros and cash flows used in financing activities totalled 8.0 million euros. Net cash flows totalled 1.4 million euros.

 

Staff

At 30 June 2011, the Group employed 2,004 people (31 December 2010: 2,115): 454 in Estonia, 443 in Latvia, 516 in Lithuania, 350 in Poland, 157 in Slovakia and 84 in Belarus.

In H1 2011, employee wages and salaries including social security taxes in the Group amounted to 15.1 million euros (H1 2010: 14.7 million euros). In H1 2011, the remuneration and benefits of the Group’s Supervisory and Management Board including social security taxes totalled 0.18 million euros (H1 2010: 0.16 million euros).

 

 Consolidated statement of financial position (in thousands of euros)

  30.06.2011 31.12.2010
ASSETS    
Current assets    
Cash and cash equivalents 40,958 28,960
Financial investments 3,796 3,937
Receivables and prepayments 4,121 4,959
Prepaid income tax 671 734
Inventories 1,019 1,416
Non-current assets held for sale 794 1,105
Total current assets 51,359 41,111
     
Non-current assets    
Deferred tax assets 1,065 1,098
Financial investments 930 927
Other long-term receivables 708 949
Investment property 1,414 1,414
Property, plant and equipment 24,019 33,135
Intangible assets 28,697 29,062
Total non-current assets 56,833 66,585
     
TOTAL ASSETS 108,192 107,696
     
     
LIABILITIES AND EQUITY    
Current liabilities    
Borrowings 3,109 3,109
Trade and other payables 24,938 10,782
Income tax payable 827 833
Provisions 855 1,694
Total current liabilities 29,729 16,418
     
Non-current liabilities    
Deferred tax liability 189 313
Borrowings 4,676 6,231
Total non-current liabilities 4,865 6,544
     
TOTAL LIABILITIES 34,594 22,962
     
EQUITY    
Share capital 81,718 96,717
Share premium 14,535 14,535
Statutory reserve capital 2,470 2,413
Translation reserves -165 740
Accumulated losses -29,333 -33,703
Total equity attributable to equity holders of the parent 69,225 80,702
Non-controlling interest 4,373 4,032
TOTAL EQUITY 73,598 84,734
     
TOTAL LIABILITIES AND EQUITY 108,192 107,696


  

Consolidated statement of comprehensive income (in thousands of euros)

  Q2 2011 Q2 2010 6m 2011 6m 2010
Continuing operations        
Income from gaming transactions 26,701 24,519 53,050 48,026
Revenue 2,030 1,722 3,831 3,216
Other income 1,990 171 4,011 308
Total revenue and income 30,721 26,412 60,892 51,550
         
Cost of materials, goods and services -671 -551 -1,306 -1,096
Other operating expenses -14,088 -13,440 -28,267 -26,688
Staff costs -7,217 -7,092 -14,373 -14,066
Depreciation, amortisation and impairment -3,605 -4,720 -7,791 -8,781
Other expenses -660 -31 -986 -30
Total operating expenses -26,241 -25,834 -52,723 -50,661
         
Operating profit 4,480 578 8,169 889
         
Interest income 78 68 153 131
Interest expense -117 -169 -244 -403
Foreign exchange gains (losses) 98 5 114 -22
Other finance income and costs -3 -22 -5 -24
Total finance income and costs 56 -118 18 -318
         
Profit from operating activities 4,536 460 8,187 571
         
Income tax expense -604 -330 -957 -287
Net profit for the period from continuing operations 3,932 130 7,230 284
         
Net profit (loss) for the period from discontinued operations 634 -1,255 -2,462 -1,509
         
Net profit (loss) for the period 4,566 -1,125 4,768 -1,225
Attributable to equity holders of the parent company 4,245 -760 4,427 -1,104
Attributable to non-controlling interest 321 -365 341 -121
         
         
Other comprehensive income        
Currency translation differences -679 -1,487 -905 -19
Total comprehensive profit (loss) for the period 3,887 -2,612 3,863 -1,244
Attributable to equity holders of the parent company 3,566 -2,247 3,522 -1,123
Attributable to non-controlling interest 321 -365 341 -121
         
         
Basic earnings (loss) per share* 2.8 -0.5 2.9 -0.7
From continuing operations 2.4 0.3 4.5 0.3
From discontinuing operations 0.4 -0.8 -1.6 -1.0
         
Diluted earnings (loss) per share* 2.8 -0.5 2.9 -0.7
From continuing operations 2.4 0.3 4.5 0.3
From discontinuing operations 0.4 -0.8 -1.6 -1.0

* euro cents

 

For further information, please contact:

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

 

 

 


Olympic_interim_Q2_2011_ENG.pdf

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