Ent Gaming Asia widens 1Q loss, selling more assets
Nasdaq-listed Entertainment Gaming Asia Inc reported a net loss of US$2.04 million for the first quarter of 2017, compared to a net loss of US$1.48 million in the prior-year period.
The firm said in a Thursday filing that consolidated revenue from continuing operations in the three months to March 31 was US$416,000, a year-on-year decrease of 31 percent.
Consolidated revenue for the period comprised US$379,000 from the company’s gaming operations in the Philippines and US$37,000 from the commercial testing of its social gaming application, according to the filing.
Entertainment Gaming Asia said its selling, general and administrative expenses more than doubled in the first three months of 2017, to approximately US$1.81 million, compared to US$758,000 in the first quarter of 2016. The increase in expenses was primarily related to the ramping up of its social gaming operations, the company said.
Entertainment Gaming Asia’s business activities include leasing electronic gaming machines (EGMs) to the gaming industry in Asia. The firm has been restructuring its business and sold last year its assets related to gaming products operations and all its gaming assets in Cambodia, and now has operations only in the Philippines.
But Entertainment Gaming Asia said in Thursday’s filing that it had entered into a non-binding memorandum of understanding – with an undisclosed party – to sell its remaining operating assets in the Philippines for a cash consideration of approximately US$1.9 million.
The firm said the deal would provide an estimated pre-tax gain of about US$1.3 million. The sale is expected to close within the second quarter of 2017, it added.
Entertainment Gaming Asia reported in April a net loss of nearly US$9.7 million for full-year 2016.
Casino investor Melco International Development Ltd – a company controlled by Lawrence Ho Yau Lung – holds approximately 65 percent of Entertainment Gaming Asia. Melco International is considering taking private Entertainment Gaming Asia, according to a previous filing from the latter company.
Melco International “is reviewing potential strategic alternatives” with respect to Entertainment Gaming Asia and is “considering making an offer… to acquire all of the outstanding common stock” of the company that it does not already own, Entertainment Gaming Asia had said in a filing in April.
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