Announcements

OEG: Consolidated unaudited results for Q2 and 6 months of 2017

Posted on 27.07.2017

Key performance indicators of the Group

    6M 2017 6M 2016 6M 2015
Revenue before gaming taxes m€ 104.4 99.2 86.5
Gaming tax m€ -21.6 -22.9 -20.4
Net revenue m€ 82.8 76.3 66.0
Total net revenue and income m€ 82.8 76.8 66.3
EBITDA m€ 20.9 17.1 18.4
EBIT m€ 14.7 12.0 14.5
Net profit m€ 12.6 10.1 12.4
         
EBITDA margin % 25.3 22.5 27.9
Operating margin % 17.8 15.8 21.9
Net margin % 15.2 13.3 18.7
         
Assets m€ 150.1 188.9 125.0
Equity m€ 127.2 108.8 106.8
ROE % 10.4 8.9 11.5
ROA % 8.3 5.8 9.8
Current ratio times 2.0 0.8 2.2
         
Casinos at end of period # 117 125 96
Casino floor area at end of period m2 38,784 39,223 30,263
Betting points at the end of period # 30 33 0
Betting points floor area at end of period m2 846 899 0
Employees # 3,059 3,260 2,653
         
Slot machines at end of period # 4,098 4,159 3,351
Electronic roulette terminals at the end of period # 116 148 104
Gaming tables at end of period # 165 198 182
Tournament poker gaming tables at the end of period # 66 63 44

 

Key developments of the Group during 6 months 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 6 months of 2017 amounted to EUR 104.4 million, up 5.2% or EUR 5.2 million y‑o‑y.
  • Total gaming revenue before gaming taxes accounted for 90.4% (94,3 m€) and other revenues for 9.6% (10.0 m€) of the Group’s consolidated total sales revenues for 6 months of 2017. A year before the revenue split was 94.0% (93.3 m€) and 6.0% (5.9 m€), respectively.
  • The Group’s consolidated EBITDA for 6 months of 2017 amounted to EUR 20.9 million, a growth of 22.1% from EUR 17.1 million a year before. The Group’s consolidated operating profit increased EUR 2.7 million (22.3%) to EUR 14.7 million.
  • The Group’s consolidated net profit attributable to equity holders of the parent company for 6 months of 2017 totalled EUR 12.8 million compared to EUR 9.8 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 6 months of 2017 amounted to EUR 0 million (in 6 months of 2016 net profit of EUR 0.3 m€).
  • 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 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 was 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 would own 100% of the shares in both entities after the demerger. Demerger was completed on 16 May 2017.
  • On 28 March 2017 Group initiated proceedings for delisting its shares from the main market of the Warsaw Stock Exchange.
  • The general meeting of shareholders held on 20 April 2017 decided to pay out dividends in amount of EUR 15,179,120.60 (EUR 0.1 per share), that were paid out to shareholders on 9 May 2017.
  • On 9 May 2017 Group announced that Italian subsidiaries of OEG, casino operating companies Slottery S.r.l. and Jackpot Game S.r.l., have concluded a merger agreement. The merger was finalised on 28 June 2017 and during the course of the merger Jackpot Game S.r.l. was merged with Slottery S.r.l. The aim of the merger is the adjustment of the group’s structure.
  • On 29 May 2017 OEG announced of the liquidation of its Belarus subsidiary Olympic Casino Bel IP. The aim of the liquidation was the adjustment of the group’s structure.
  • On 9 June 2017 the Group announced that its Lithuanian subsidiaries, Olympic Casino Group Baltija UAB and Orakulas UAB have concluded a merger agreement on 7.06.2017. The merger will be finalised within the current year and during the course of the merger Orakulas UAB will merge with Olympic Casino Group Baltija UAB. After the merger has been completed the group will carry on operating the casinos and betting shops in Lithuania only through Olympic Casino Group Baltija UAB. The aim of the merger is the adjustment of the group’s structure.

 

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

000€ Q2 2017 Q2 2016 Change 6M 2017 6M 2016 Change
Estonia 14,329 10,592 35.3% 26,729 20,123 32.8%
Latvia 16,662 15,205 9.6% 33,203 31,229 6.3%
Lithuania 6,673 6,003 11.2% 13,705 12,291 11.5%
Slovakia 4,288 4,790 -10.5% 8,790 8,713 0.9%
Italy 7,750 6,392 21.2% 15,665 12,679 23.6%
Malta 3,143 2,552 23.2% 6,259 4,738 32.1%
Poland 0 4,657 -100.0% 0 9,229 -100.0%
Belarus 0 64 -100.0% 0 186 -100.0%
Total 52,845 50,255 5.2% 104,351 99,188 5.2%

 

Number of casinos by segment:

  30 June 2017 30 June 2016
Estonia 24 24
Latvia 52 57
Lithuania 18 19
Slovakia 7 8
Italy 15 14
Malta 1 1
Poland 0 1
Belarus 0 1
Total 117 125

 

The Group’s consolidated operating expenses for 6 months of 2017 amounted to EUR 68.1 million, up 5.2% or EUR 3.4 million y‑o‑y. The growth was highest in personnel expenses (+1.1 m€, +4.3%), amortisation, depreciation and impairment costs (+1.1 m€, +21.7%), rent expenses (+0.9 m€, +11.4%) and utilities and maintenance costs (+0.3 m€, +7.2%). Personnel expenses (27.5 m€) and rent costs (8.3 m€) represented the largest cost items accounting for 52.6% of total operating expenses.

The income statement now presents revenue before gaming taxes, then gaming taxes and thereafter net revenue. Therefore, gaming taxes are no longer presented under operating expenses. Gaming taxes for 6 months of 2017 decreased 5.8% (‑1.3 m€) compared to 6 months of 2016.

 

Overview by markets

Estonia

Total revenue before gaming taxes of Estonian segment for 6 months of 2017 amounted to EUR 26.7 million (+6.6 m€, +32.8%), EBITDA to EUR 4.3 million (+2.2 m€, +103.6%) and operating profit to EUR 2.5 million (+1.6 m€, +183.2%). Gaming revenue before gaming taxes increased 14.7% y-o-y amounting to EUR 21.5 million.

At the end of June 2017, there were 24 Olympic casinos with 988 slot machines, 46 electronic roulette terminals, 24 gaming tables and 24 poker tournament tables operating in Estonia. At 30 June 2017 Estonian operations employed 732 people.

Latvia

Total revenue before gaming taxes of Latvian segment for 6 months of 2017 amounted to EUR 33.2 million (+2.0 m€, +6.3%), EBITDA to EUR 13.5 million (+0.9 m€, +7.4%) and operating profit to EUR 11.5 million (+0.7 m€, +6.3%). Gaming revenue before gaming taxes increased 5.8% y‑o‑y amounting to EUR 30.2 million.

At the end of June 2017, there were 52 Olympic casinos with 1,466 slot machines, 8 electronic roulette terminals, 24 gaming tables and 9 poker tournament tables operating in Latvia. At 30 June 2017 Latvian operations employed 930 people.

Lithuania

Total revenue before gaming taxes of Lithuanian segment for 6 months of 2017 amounted to EUR 13.7 million (+1.4 m€, +11.5%), EBITDA to EUR 1.7 million (+0.8 m€, +90.6%) and operating profit to EUR 0.9 million (+0.7 m€, +525.8%). Gaming revenue before gaming taxes increased 11.6% y-o-y amounting to EUR 13.0 million.

At the end of June 2017, there were 18 Olympic casinos with 544 slot machines, 8 electronic roulette terminals, 53 gaming tables and 2 poker tournament tables and 30 betting shops operating in Lithuania. At 30 June 2017 Lithuanian operations employed 766 people.

Slovakia

Total revenue before gaming taxes of Slovak segment for 6 months of 2017 amounted to EUR 8.8 million (+0.1 m€, +0.9%), EBITDA to EUR 0.9 million (-0.1 m€, -8.7%) and operating profit to EUR 0.2 million (-0.2 m€, -40.7%). Gaming revenue before gaming taxes increased 1.2% y-o-y amounting to EUR 7.9 million.

At the end of June 2017, there were 7 Olympic casinos with 272 slot machines, 36 electronic roulette terminals, 44 gaming tables and 21 poker tournament tables operating in Slovakia. At  30 June 2017 Slovak operations employed 338 people.

Italy

Total revenue before gaming taxes of Italian segment for 6 months of 2017 amounted to EUR 15.7 million (+3.0 m€, +23.6%), EBITDA to EUR 1.0 million (+0.6 m€, +151.9%) and operating profit to EUR 0.6 million (+0.3 m€, +138.5%). Gaming revenue before gaming taxes increased 23.3% y-o-y amounting to EUR 15.5 million.

At the end of June 2017, there were 15 VLT slot casinos with 543 slot machines operating in Italy. At 30 June 2017 Italian operations employed 92 people.

Malta

Total revenue before gaming taxes of Maltese segment for 6 months of 2017 amounted to EUR 6.3 million (+1.5 m€, +32.1%), EBITDA to EUR -0.4 million (-0.1 m€) and operating loss to EUR 1.0 million (-0.1 m€). Gaming revenue before gaming taxes increased 31.9% y-o-y amounting to EUR 6.2 million.

At the end of June 2017, there was 1 casino with 285 slot machines, 18 electronic roulette terminals, 20 gaming tables and 10 poker tournament tables operating in Malta. At 30 June 2017 Maltese operations employed 198 people.

 

Financial position

At 30 June 2017, the total assets of the Group amounted to EUR 150.1 million, down 20.6% or EUR 38.8 million compared to the same period a year ago.

Current assets totalled EUR 43.6 million or 29.0% of total assets, and non-current assets EUR 106.5 million or 71.0% of total assets. The liabilities amounted to EUR 22.9 million and equity to EUR 127.2 million. The largest liabilities included suppliers payables and advances (8.7 m€), tax liabilities (5.4 m€) and payables to employees (5.2 m€).

Investments

Within 6 months of 2017, the Group’s expenditures on property, plant and equipment totalled EUR 4.5 million (‑21.5 m€, ‑82.6%), of which EUR 3.2 million was invested into construction and reconstruction of casinos and EUR 1.1 million into new gaming equipment. First half of 2016 also includes investments into the hotel construction, which is why investments for the 6 months of 2017 were lower.

Cash flows

Group’s cash flows generated within 6 months of 2017 from operating activities amounted to EUR 19.4 million (+5.0 m€) and cash flows used in investing activities to EUR -4.8 million (+26.1 m€). Financing cash flows amounted to EUR ‑15.3 million (-29.1 m€). Net cash flows totalled EUR -0.7 million (+2.0 m€).

Staff

At 30 June 2017 Group employed 3,059 people, down by 201 y-o-y mostly due to casino´s closure in Poland.

Within 6 months of 2017, total personnel expenses amounted to EUR 27.5 million (+1.1 m€, +4.3%). For 6 months 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 511 thousand (EUR 741 thousand for 6 months of 2016) and EUR 74 thousand (EUR 74 thousand for 6 months of 2016), respectively.

 

Consolidated statement of financial position

(in EUR thousands)   30.06.2017 31.12.2016
ASSETS      
Current assets      
Cash and cash equivalents   37,180 37,933
Financial investments   100 99
Receivables and prepayments   4,193 4,552
Prepaid income tax   378 913
Inventories   1,726 1,532
Total current assets   43,577 45,029
       
Non-current assets      
Deferred tax assets   462 426
Financial investments   5,033 4,988
Other long-term receivables and prepayments   1,013 776
Investment property   295 295
Property, plant and equipment   49,901 51,250
Intangible assets   49,813 49,932
Total non-current assets   106,517 107,667
       
TOTAL ASSETS   150,094 152,696
       
       
LIABILITIES AND EQUITY      
Current liabilities      
Trade and other payables   19,826 19,806
Income tax payable   318 292
Provisions   1,301 1,329
Total current liabilities   21,445 21,427
       
Non-current liabilities      
Deferred tax liability   680 693
Other long-term payables   766 703
Total non-current liabilities   1,446 1,396
       
TOTAL LIABILITIES   22,891 22,823
       
EQUITY      
Share capital   60,716 60,716
Share premium   252 258
Treasury shares   -53 0
Statutory reserve capital   6,325 4,860
Other reserves   504 538
Translation reserves   11 -26
Retained earnings   54,016 57,825
Total equity attributable to equity holders of the parent   121,771 124,171
Non-controlling interest   5,432 5,702
TOTAL EQUITY   127,203 129,873
       
TOTAL LIABILITIES AND EQUITY   150,094 152,696

 

Consolidated statement of comprehensive income

(in EUR thousands)   Q2 2017 Q2 2016 6M 2017 6M 2016
           
Continuing operations          
Gross gaming revenue   47,291 42,569 94,319 84,033
Other revenue   5,554 2,965 10,032 5,740
Total revenue before gaming taxes   52,845 45,534 104,351 89,773
Gaming taxes   -10,365 -9,302 -21,575 -18,321
Net revenue   42,480 36,232 82,776 71,452
Other income   10 120 20 284
Total net revenue and income   42,490 36,352 82,796 71,736
           
Cost of materials, goods and services   -1,382 -1,305 -2,845 -2,372
Other operating expenses   -15,860 -14,396 -31,373 -27,706
Staff costs   -14,077 -12,830 -27,524 -24,886
Depreciation, amortisation and impairment   -3,148 -2,556 -6,213 -4,930
Other expenses   -66 -84 -129 -196
Total operating expenses   -34,533 -31,171 -68,084 -60,090
           
Operating profit   7,957 5,181 14,712 11,646
           
Interest income   0 5 4 20
Interest expense   0 -15 0 -15
Foreign exchange gains (losses)   -21 24 -29 16
Other finance income and costs   -9 0 -9 -3
Total finance income and costs   -30 14 -34 18
           
Profit before income tax   7,927 5,195 14,678 11,664
           
Income tax expense   -978 -862 -2 113 -1 866
Net profit for the period from continuing operations   6,949 4,333 12,565 9,798
Net profit for the period from discontinued operations   0 317 0 315
           
Net profit for the period   6,949 4,650 12,565 10,113
Attributable to equity holders of the parent company   6,825 4,652 12,835 9,750
Attributable to non-controlling interest   124 -2 -270 363
           
Other comprehensive income          
Items that may be subsequently reclassified to profit or loss          
Currency translation differences   0 -347 37 -166
Total comprehensive profit for the period   6,949 4,303 12,602 9,947
Attributable to equity holders of the parent company   6,825 4,305 12,872 9,584
Attributable to non-controlling interest   124 -2 -270 363
           
           
Basic earnings per share*   4.5 3.1 8.5 6.4
From continuing operations   4.5 2.9 8.5 6.2
From discontinuing operations   0.0 0.2 0.0 0.2
           
Diluted earnings per share*   4.5 3.1 8.4 6.4
From continuing operations   4.5 2.9 8.4 6.2
From discontinuing operations   0.0 0.2 0.0 0.2

* 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_2017_ENG.pdf 

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