Cost Savings Help Spanish Gambling Group To Achieve a 5 Percent Rise In Profit
Spanish online and land gambling group Cirsa posts FY-2016 report.
The Spanish online and land gambling group Cirsa has posted a profit of Euro 398 million for FY-2016, up 5 percent year-on-year, despite flat revenue of Euro 1.6 billion, thanks to effective cost cutting, growth in Latin America and at home, and a vibrant online performance.
CEO Joaquim Agut reported steady progress by the group, and noted:
“The correct implementation of the group’s operating plans in the various locations and businesses and the overall improvement of all activities in Spain have helped to achieve these results, which have exceeded market expectations.”
Among the operational highlights, Agut said that the group had opened new casinos in the Dominican Republic and Colombia, and the joint venture betting business across 15 of Spain’s autonomous regions operates under the Sportium Ladbrokes brand had performed well, with increased emphasis on online services that included games and slots.
Italy The Second Largest Betting Market In The EU
FY-2016 figures record rise of 25 percent y-o-y.
The Italian online betting market is now the second largest in the European Union according to a news report on Italy Europe, which claims that FY-2016 numbers show a record rise in revenues of 25 percent year-on-year to top Euro 1 billion.
Casino games and sports bet were the principal contributors, with casino games in particular delivering Euro 439 million with a 43 percent market share, while sports betting reached Euro 350 million – up 31 percent.
Online poker continued to languish, with stakes down 10 percent at just Euro 133 million. Other forms of gambling ranging from skill games and bingo to scratchcards and virtual horse racing, contributed Euro 100 million – a 20 percent y-o-y increase for this category.
Italy Europe notes that last year was the first in which online gambling growth surpassed that of entertainment and show business.
The report advises that among 2017 anticipated developments there will be calls for bids on 120 new ‘long distance’ gaming licenses worth around Euro 24 million. A senior Italian analyst, Samuele Fraternali, says:
“This call for bids should redefine the sector’s competitive balance… these professionals will have to adhere to the new privacy law in order to further protect the bettors.”
Fraternali explained that there have been developments in the world of betting on horse races and especially eSports, with the latter category having the potential to draw a younger demographic to the industry with extensive television and live streaming events.
Novomatic Reports Highest Revenues Yet
Revenues rise 10 percent year-on-year to a company record of Euro 2.3 billion in 2016.
The Austrian land and online gambling technology giant Novomatic has claimed a new company record in revenues in its FY 2016 report, revealing that revenues rose 10 percent year-on-year to Euro 2.3 billion.
The report, published Monday, notes that the 2016 revenues are the highest in the group’s 36-year history, with the largest increase achieved in gaming machine revenues, which rose by Euro 126.7 million to Euro 1,028.9 million.
Group EBITDA came to Euro 588.5 million (2015: Euro 616.7 million).
During the year under review, the number of employees in the group grew by 18.1 percent to a total of 23,849, and the number of fully consolidated companies in the financial year 2016 increased to 217 (2015: 188).
Harald Neumann, CEO of the Novomatic group, said in a statement:
“Not only did we achieve excellent financial results in 2016, but we also set out clear strategic paths that are particularly important for the further expansion of the group. These include the signing of an agreement to acquire approximately 53 percent of the shares in the publicly traded Australian company Ainsworth Game Technology Ltd. Thanks to the strong presence of Ainsworth in Australia, Asia, North and South America, Novomatic will, in future, also intensify its work in these markets.”
Neumann said that the group will continue to expand in Europe, and to this end a strong signal was sent in the important British market with the acquisition of Talarius Ltd. by the UK branch of the group.
Novomatic also expanded its market position in Germany, Italy and Spain by acquiring numerous smaller companies. In Austria, the acquisition of shares in Casinos Austria AG and Österreichische Lotterien GmbH was the focus of attention, along with the associated decision by the Cartel Court. The legal steps resulting from the acquisition of 17.19 percent of the shares will now be completed in the forthcoming reporting year of 2017.
In order to harness growth opportunities, the group issued a benchmark bond in September 2016 with a volume of Euro 500 million, the first such bond from an Austrian company in 2016.
Combined Group revenue of Novomatic, as well as the two Swiss sister holding companies ACE Casino Holding AG and Gryphon Invest AG, also reached a new high in 2016 at Euro 4,402 million (2015: EUR 3,929 million). Together, the companies in question employ around 29,000 employees worldwide, of which approximately 3,300 are located in Austria.
Entertainment Gaming Asia Reports Losses
Company’s transition strategy to social games development is proving expensive.
Results posted this week by Nasdaq-listed Entertainment Gaming Asia appear to indicate that the company’s 2016 announced strategy to transition from slot machine supply to social games development is proving expensive.
For the last quarter of 2016 the company reported losses of $6.7 million and revenue of only $357,000, with FY-2016 losses rising to $9.7 million on revenue of $2 million for the year, the latter figure representing a 26 percent year-on-year decline.
Management cited lower gaming operations revenue, higher operating expenses and higher taxes in its Philippine operations as the principal attributing factors.
Entertainment Gaming Asia withdrew from operations in Cambodia in 2016, selling all of its EGM seats at NagaWorld Casino in order to lay the groundwork for “new growth opportunities” elsewhere.
In its results release the company observed that “all revenue and expenses associated with the gaming products operations and Cambodia gaming operations have been reclassified as discontinued operations for the periods presented.”
Late last year EGA launched its social gaming ambitions in the form of City of Games; Q4 revenue of $7,000 was achieved, set against losses of $120,000 for the quarter and $196,000 for the full year 2016.
The situation is not as bleak as the figures suggest, bearing in mind that the social games strategy has yet to fully develop. Thanks to its divestment in other areas, EGA has no debt burden and cash reserves in excess of $30 million…plenty of gas in the development tank. The company also has a powerful majority shareholder in the form of Melco International Development Ltd.