GGRAsia – Gaming operations, product sales boost EGT revenue

Gaming operations, product sales boost EGT revenue

May 15, 2015 Newsdesk Latest News, Rest of Asia, Top of the deck

Casino equipment maker and gaming venue operator Entertainment Gaming Asia Inc (EGT) reported revenue of US$8.3 million for the first quarter of 2015, up by 76 percent from a year earlier. The company said revenue was boosted by “increases in both the gaming operations and gaming products business divisions”.

The firm posted a net profit of US$570,000 for the first three months of 2015, compared to a net loss of US$1.0 million in the prior-year period. It said adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) reached US$2.4 million in the three months to March 31, up from US$960,000 a year ago.

Nasdaq-listed EGT operates slot machines on a participation basis and manufactures and distributes gaming chips, gaming plaques and related products to casinos in Asia and Australia under the Dolphin brand.

Gaming operations revenue hit US$4.0 million in the first quarter of 2015, an increase of 3 percent year-on-year, “due to improvement in the Cambodia operations partially offset by a decline in the Philippines operations,” the firm said in a filing. Revenue from gaming products increased to US$4.3 million in the period on higher sales of gaming chips and plaques, it added.

“Gaming products benefitted from an attractive reorder pipeline from existing customers and our continuing efforts to improve profitability while growth in gaming operations was largely due to solid performance from NagaWorld,” said Clarence Chung Yuk Man, chairman and chief executive of EGT.

NagaWorld, operated by NagaCorp Ltd, is Cambodia’s largest casino complex and the only authorised venue in the capital Phnom Pehn. The venue’s management sub-contracts the operation of its slot machines to third parties.

EGT’s Mr Chung said his firm is now focused on securing new projects “that will drive long-term growth and earnings visibility for the company”.

“With a cash position of over US$20.0 million and as an indirect, majority-owned subsidiary of Melco International Development Ltd, a leader in Asian gaming, we believe we have greatly enhanced our financial flexibility and improved our access to a broader pool of potential growth opportunities in growing gaming markets in Asia,” said Mr Chung.

EGT became a subsidiary of Hong Kong-listed Melco International last year, following a share sale in November. Melco International, chaired by Lawrence Ho Yau Lung, is one of the two controlling shareholders of Macau and Philippines casino operator Melco Crown Entertainment Ltd.

In March, EGT said it was back in compliance with Nasdaq’s listing requirements, reaching the minimum US$1.00 bid price per share.