GGRAsia – Revenue drop keeps EGT in red during 3Q

Revenue drop keeps EGT in red during 3Q

Nov 07, 2014 Newsdesk Latest News, Rest of Asia, Top of the deck

Nasdaq-listed Entertainment Gaming Asia Inc (EGT) reported a net loss of US$261,000 for the three months ended September 30. That was an improvement from the US$309,000 loss posted a year earlier.

The company, linked to Hong Kong-listed casino investor Melco International Development Ltd, is engaged in the leasing of slot machines on a revenue-sharing basis to gaming venues in the Indochina region. The firm is also a maker of casino currency.

EGT’s gaming operations revenue was US$4.0 million for the third quarter of 2014, down 9 percent compared to US$4.3 million in the prior-year period, it said in a filing on Thursday.

The firm said the results were negatively affected by a drop in slot machine participation revenue from NagaWorld casino resort, operated by Hong Kong-listed NagaCorp Ltd. The development is Cambodia’s largest casino complex and the only one in that country’s capital Phnom Pehn.

“In addition to increased player jackpot payouts for our NagaWorld operations, we experienced some business disruption and a temporary reduction in installed machines during the quarter due to NagaWorld’s renovation of certain parts of its casino floor,” EGT chairman and chief executive Clarence Chung Yuk Man said in a statement. “With this floor renovation now complete, our installed machine base and player traffic levels have returned to more normalised levels,” Mr Chung added.

Gaming operations revenue was comprised solely of slot participation as the company ceased operations of its Dreamworld Pailin casino, in Cambodia, last June.

Revenue from gaming products was US$437,000 in the three months ended September 30, down from US$1.1 million in the third quarter of 2013.

“This was a result of lower sales to existing customers, under-absorption of fixed costs stemming from the lower sales volumes and certain production inefficiencies,” Mr Chung said.

He added: “During the quarter, we also focused production efforts on fulfilling two previously announced gaming chip and plaque orders for the Philippines totalling over $4.0 million in revenue. These orders are scheduled to be delivered in the fourth quarter of 2014.”

EGT reported adjusted EBITDA – earnings from continuing operations before interest, taxation, depreciation and amortisation and non-cash charges – of US$1.6 million for the third quarter of 2014, down by 24 percent in year-on-year terms.

The firm last month was granted a six-month extension to regain compliance with the minimum US$1.0 bid price per share listing requirement for Nasdaq. The new deadline is April 13, 2015.

Prior to the results announcement, EGT’s stock rose 2 percent on Thursday trading in New York, to close at US$0.51 per unit.