OEG: consolidated unaudited results for Q2 and H1 2014

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| Source: Olympic Entertainment Group
multilang-release

Key performance indicators of the Group

    H1 2014 H1 2013 H1 2012
Revenues m€ 72.2 67.4 64.1
Gaming tax m€ 14.3 14.0 13.5
EBITDA m€ 16.7 16.7 17.3
EBIT m€ 12.6 12.5 11.7
Net profit m€ 10.3 9.7 10.4
EBITDA margin % 23.1 24.7 27.0
Operating margin % 17.5 18.5 18.3
Net margin % 14.3 14.3 16.2
         
Assets m€ 115.4 101.0 109.9
Equity m€ 97.8 84.7 78.1
ROE % 10.8 11.5 13.8
ROA % 8.8 9.2 9.8
Current ratio times 2.3 2.4 1.9
         
Casinos at end of period # 93 83 62
Casino floor area (m2) at end of period m2 31,060 26,235 23,480
Employees # 2,593 2,561 2,349
         
Slot machines at end of period # 3,337 3,056 2,487
Gaming tables at end of period # 192 189 183

 

Key developments of the Group during the first half-year of 2014:

  • The Group’s consolidated sales revenues for H1 2014 amounted to EUR 72.0 million, up 7.2% or EUR 4.8 million y‑o‑y.
  • Gaming revenues accounted for 94.0% (67.7 m€) and other revenues for 6.0% (4.3 m€) of the Group’s consolidated sales revenues for H1 2014. A year before the revenue split was 93.3% (62.6 m€) and 6.7% (4.5 m€), respectively.
  • The Group’s consolidated EBITDA for H1 2014 amounted to EUR 16.7 million, a growth of 0.2% from EUR 16.7 million a year before. At the same time, the Group’s consolidated operating profit increased EUR 0.2 million (+1.4%) to EUR 12.6 million.
  • In H1 2014, the consolidated net profit attributable to equity holders of the parent company totalled EUR 10.3 million compared to EUR 9.7 million a year ago.
  • On 23 January 2014 Olympic Entertainment Group AS has acquired 100% shareholding in Slovak VLT slot casino operator WINWIN Slovakia S.r.o. (renamed later as OlyBet Slovakia S.r.o.) and has opened its first VLT casino on Slovak market during the second quarter of 2014.
  • The general meeting of shareholders held on 25 April 2014 has decided to pay out dividends in amount of EUR 15,132,950.50, that were paid out to shareholders on 13 May 2014.
  • On 29 April 2014 Olympic Entertainment Group AS has increased to 70% its holding in The Box S.r.l, a company that manages operations in Italy, which in turn has acquired a 100% holding in Slottery S.r.l.
  • In May 2014 Olympic Entertainment Group AS has adopted a decision to restructure its Latvian subsidiaries, which leaded to conversion of Olympic Casino Latvia SIA share capital into euros and its increase. It was also decided to merge OEG Latvian subsidiries Olympic Casino Latvia SIA and Altea SIA. The merger process will take 10 months.
  • On 21 July 2014 the supervisory board of Olympic Entertainment Group AS has adopted a resolution to increase the share capital of the Company by EUR 184,680.40 by issuing shares without nominal value. The amount of share capital of the Company after the issuing of new shares is EUR 60,716,482.40. The increase of share capital relates to share option agreements concluded by the Company in 2011 and the exercise of options by option holders.

 

The Group’s consolidated sales revenues by segments:

‘000€ Q2 2014 Q2 2013 Change H1 2014 H1 2013 Change
Estonia 8,459 8,289 2.1% 16,247 16,397 -0.9%
Latvia 11,267 8,398 34.2% 21,682 16,428 32.0%
Lithuania 5,206 4,906 6.1% 10,705 10,036 6.7%
Poland 5,975 7,287 -18.0% 12,193 13,569 -10.1%
Slovakia 4,111 3,787 8.6% 7,736 7,706 0.4%
Belarus 494 563 -12.3% 966 1,254 -23.0%
Italy 1,673 858 95.0% 2,463 1,757 40.2%
Total 37,185 34,088 9.1% 71,992 67,147 7.2%

 

Number of casinos by segment:

  30 June 2014 30 June 2013
Estonia 18 18
Latvia 38 38
Lithuania 12 12
Poland 2 3
Slovakia 6 5
Belarus 6 5
Italy 11 2
Total 93 83

 

The Group’s consolidated operating expenses for H1 2014 amounted to EUR 59.6 million, up 8.5% or EUR 4.7 million y-o-y. The growth was highest in personnel expenses (+2.4 m€, +13.9%), rent expenses (+0.7 m€, +13.1%) and other services costs (+0.5 mln eurot, +44.0%). Amortization and depreciation cost declined the most (-0.1 m€, -3.5%). Personnel expenses (19.3 m€) and gaming tax (14.3 m€) represented the largest cost items accounting for 56.3% of total operating expenses.

 

Overview by markets

Estonia

The sales revenues of Estonian segment for H1 2014 amounted to EUR 16.2 million (-0.1 m€, -1.0%), EBITDA to EUR 3.9 million (+0.3 m€, +7.8%) and operating profit to EUR 3.0 million (+0.1 m€, +4.1%). Gaming revenue increased 3.8% y-o-y amounting to EUR 15.5 million.

The market share of Olympic Casino Eesti AS in the Estonian land-based gaming market was 55% in Q2 2014, compared to 56% a year ago. Total Estonian gaming market increased by 6% as compared to the H1 2013.

At the end of H1 2014, there were 18 Olympic casinos with 737 slot machines and 19 gaming tables operating in Estonia. As at 30 June 2014, the Estonian operations employed 478 people.

 

Latvia

The sales revenues of Latvian segment for H1 2014 amounted to EUR 21.7 million (+5.3 m€, +32.0%), EBITDA to EUR 8.3 million (+1.2 m€, +16.3%) and operating profit to EUR 6.8 million (+0.9 m€, +14.4%). Gaming revenue increased 32.4% y-o-y amounting to EUR 19.9 million.

The market share of Olympic Casino Latvia SIA in the Latvian gaming market was 23% in Q2 2014, compared to 21% a year ago. Total Latvian gaming market increased by 8% as compared to the H1 2013.

As at the end of H1 2014, there were 38 Olympic casinos with 1,066 slot machines and 18 gaming tables operating in Latvia. As at 30 June 2014, there were 690 employees in Latvia.

 

Lithuania

The sales revenues of Lithuanian segment for H1 2014 amounted to EUR 10.7 million (+0.7 m€, +6.7%), EBITDA to EUR 2.1 million (+0.1 m€, +5.8%) and operating profit to EUR 1.6 million (+0.4 m€, +30.1%). Gaming revenue increased 6.6% y-o-y amounting to EUR 10.1 million.

As at the end of H1 2014, there were 12 Olympic casinos with 428 slot machines and 63 gaming tables operating in Lithuania. As at 30 June 2014, the Lithuanian operations employed 670 people.

 

Poland

The sales revenues of Polish segment for H1 2014 amounted to EUR 12.2 million (-1.4 m€, -10.1%), EBITDA to EUR 1.8 million (-0.9 m€, -32.5%) and operating profit to EUR 1.5 million (-0.6 m€, -28.5%). Gaming revenue decreased 10.4% y-o-y amounting to EUR 12.0 million.

As at the end of H1 2014, there were 2 Olympic casinos with 215 slot machines and 39 gaming tables operating in Poland. As at 30 June 2014, the Polish operations employed 327 people.


Slovakia

The sales revenues of Slovak segment for H1 2014 amounted to EUR 7.7 million (+0.0 m€, +0.4%), EBITDA to EUR 0.6 million (-0.4 m€, -41.4%) and operating profit to EUR 0.0 million (-0.4 m€, -90.6%). Gaming revenue decreased 0.9% y-o-y amounting to EUR 6.9 million.

As at the end of H1 2014, there were 6 Olympic casinos with 269 slot machines and 53 gaming tables operating in Slovakia. As at 30 June 2014, The Slovak operations employed 273 people.

 

Belarus

The sales revenues of Belarusian segment for H1 2014 amounted to EUR 1.0 million (-0.3 m€, -23.0%), EBITDA to EUR -0.2 million (-0.3 m€, -398.0%) and operating profit to EUR -0.2 million (-0.2 m€, -1,936.8%). Gaming revenue decreased 22.2% y‑o‑y amounting to EUR 0.9 million.

As at the end of H1 2014, there were 6 Olympic casinos with 245 slot machines operating in Belarus. As at 30 June 2014, the Belarusian operations employed 98 people.

 

Italy

The sales revenues of Italian segment before deducting the gaming tax of Italy for H1 2014 amounted to EUR 5.2 million (+1.5 mln eurot, +40.2%), EBITDA to EUR 0.2 million (+0.02 mln, +10.5%) and operating profit to EUR 0.1 million (+0.0 mln, +23.8%).

In April 2014 Olympic Entertainment Group AS has increased to 70% its holding in The Box S.r.l, a company that manages operations in Italy, which in turn has acquired a 100% holding in VLT operaator Slottery S.r.l. As a result of this transaction at the end of H1 2014, there were 11 VLT slot casinos with 377 slot machines operating in Italy. As at 30 June 2014, the Italian operations employed 57 people.

 

Financial position

As at 30 June 2014, the total assets of the Group amounted to EUR 115.4 million, up 14.3% or EUR 14.4 million compared to the same period a year ago.

Current assets totalled EUR 37.0 million or 32.0% of total assets, and non-current assets EUR 78.4 million or 68.0% of total assets. The liabilities amounted to EUR 17.6 million and equity to EUR 97.8 million. The largest liabilities included suppliers payables and advances (5.7 m€), tax liabilities (4.2 m€) and payables to employees (3.8 m€).

 

Investments

In H1 2014, the Group’s expenditures on property, plant and equipment totalled EUR 9.5 million (+3.4 m€, +55.7%), of which EUR 4.2 million was invested into new gaming equipment (+0.5m€, +13.5%) and EUR 4.9 million (+2.5 m€, +104.2%) into construction of hotel and construction and reconstruction of casinos.

 

Cash flows

In H1 2014, the Group’s cash flows generated from operating activities amounted to EUR 13.2 million (+2.5 m€, +23.9%) and cash flows from investing activities to EUR -13.6 million (-15.8 m€). Financing cash flows amounted to EUR -14.2 million (+3.6 mln eurot, +20.1%). Net cash flows totalled EUR ‑14.6 million (-9.6 m€).

 

Staff

As at 30 June 2014, the Group employed 2,593 people, up by 32 y-o-y mostly due to expansion in Italy.

In H1 2014, total personnel expenses amounted to EUR 19.3 million (+2.4 m€, +13.9%). In H1 2014, 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 449 thousand (447 thousand in H1 2013) and EUR 77 thousand (EUR 78 thousand in H1 2013), respectively.

 

Consolidated statement of financial position

(in EUR thousands)

  30.06.2014 31.12.2013
ASSETS    
Current assets    
Cash and cash equivalents 30,013 44,582
Financial investments 1,229 1,086
Receivables and prepayments 4,175 2,946
Prepaid income tax 447 357
Inventories 1,089 1,001
Total current assets 36,953 49,972
     
Non-current assets    
Deferred tax assets 1,099 1,077
Financial investments 4,268 3,396
Other long-term receivables 696 670
Investment property 1,784 1,784
Property, plant and equipment 31,994 26,513
Intangible assets 38,575 34,865
Total non-current assets 78,416 68,305
     
TOTAL ASSETS 115,369 118,277
     
     
LIABILITIES AND EQUITY    
Current liabilities    
Borrowings 239 240
Trade and other payables 14,176 13,494
Income tax payable 426 776
Provisions 1,183 1,181
Total current liabilities 16,024 15,691
     
Non-current liabilities    
Deferred tax liability 219 246
Borrowings 1,341 369
Total non-current liabilities 1,560 615
     
TOTAL LIABILITIES 17,584 16,306
     
EQUITY    
Share capital 60,532 60,532
Statutory reserve capital 2,495 1,210
Other reserves 258 235
Translation reserves -1,120 -1,204
Retained earnings 30,522 36,782
Total equity attributable to equity holders of the parent 92,687 97,555
Non-controlling interest 5,098 4,416
TOTAL EQUITY 97,785 101,971
     
TOTAL LIABILITIES AND EQUITY 115,369 118,277

 

 

Consolidated statement of comprehensive income

(in EUR thousands)

  Q2 2014 Q2 2013 H1 2014 H1 2013
         
Income from gaming transactions 34,977 31,766 67,696 62,650
Revenue 2,208 2,322 4,296 4,497
Other income 149 23 251 248
Total revenue and income 37,334 34,111 72,243 67,395
         
Cost of materials, goods and services -794 -742 -1,517 -1,448
Other operating expenses -17,926 -16,278 -34,453 -32,247
Staff costs -9,796 -8,629 -19,290 -16,932
Depreciation, amortisation and impairment -2,095 -2,092 -4,055 -4,200
Other expenses -153 -34 -284 -95
Total operating expenses -30,764 -27,775 -59,599 -54,922
         
Operating profit 6,570 6,336 12,644 12,473
         
Interest income 11 23 41 56
Interest expense -7 -4 -10 -9
Foreign exchange losses -4 -57 -6 -52
Other finance income and costs 0 0 -1 -621
Total finance income and costs 0 -38 24 -626
         
Profit from operating activities 6,570 6,298 12,668 11,847
         
Income tax expense -811 -891 -1,773 -1,688
Net profit for the period 5,759 5,407 10,895 10,159
Attributable to equity holders of the parent company 5,423 5,079 10,304 9,660
Attributable to non-controlling interest 336 328 591 499
         
         
Other comprehensive income        
Currency translation differences -21 -426 84 -852
Total comprehensive profit for the period 5,738 4,981 10,979 9,307
Attributable to equity holders of the parent company 5,402 4,653 10,388 8,808
Attributable to non-controlling interest 336 328 591 499
         
         
Basic earnings per share* 3.6 3.4 6.8 6.4
Diluted earnings per share* 3.6 3.4 6.8 6.4

* euro cents


Madis Jääger
CEO
Olympic Entertainment Group AS
Tel + 372 667 1250
E-mail madis.jaager@oc.eu
http://www.olympic-casino.com