Entertainment Gaming Asia posts record revenue and profits

TAGs: Cambodia, dreamworld, Entertainment Gaming Asia, nagaworld, Philippines

entertainment-gaming-asia-resultsEntertainment Gaming Asia (EGA), which operates gaming joints in Cambodia and the Philippines and is a leading supplier of chips and plaques to Asia-Pacific casinos, reported record revenues and net profits in 2012. Revenue rose 34% to $10.3m in Q4, while earnings were up marginally to $2.6m and net income came in at $268k, compared to a net loss of $1m in Q4 2011. Profits would have been higher but for a $226k non-cash impairment charge due to machine writedowns following the closure of an underperforming slots venue in the Philippines.

For 2012 as a whole, revenues rose 21% to $32.8m. Earnings fell to $10.9m from $11.7m in 2011, while net income came in at $1.8m, nearly triple 2011’s $642k. Revenue from gaming operations rose 17% to $20.4m, $18.6m of which came from slots operations (+7%). Revenue from other products rose 28% to $12.4m, of which $6.5m came from sales of casino chips and plaques, which more than tripled in 2012 thanks to Crown Perth’s rebranding and a major order placed by the soon-to-open Solaire Manila in the Phillipines’ Entertainment City.

In May 2012, EGA opened its first casino, Dreamworld Pailin, in Cambodia along the border with Thailand. The Dreamworld Poipet slots hall (artists’ rendering pictured above) is set for a soft opening on March 28 in Cambodia’s Economic Free Zone, also on the border with Thailand. A third Dreamworld property, Dreamworld Kampot, is set to open later this year along Cambodia’s border with Vietnam and will feature 14 gaming tables and 25 electronic gaming machines (EGM). The company also operates slots in NagaCorp‘s NagaWorld casino in Phnom Penh and the Thansur Bokor operation owned by Cambodian hotelier Sokha Hotel & Resorts. As of Dec. 31, EGA operates 824 EGMs in Cambodia and a further 581 in the Philippines.

On a post-earnings call, EGA CEO Clarence Chung told analysts the company had identified “two to three” junket operators with which it expects to strike deals in the second quarter to help feed customers into the Dreamworld properties. Chung also said EGA’s chip supply business was pursuing the “huge potential” for new sales via the flurry of new casinos being built in Manila and on Cotai in Macau. At the close of 2012, EGA had a cash balance of $10.4m with zero debt.

Meanwhile, Nagacorp’s NagaWorld casino was the scene of a major labor stoppage by casino staff. Late last month, around 800 workers – 90% of NagaWorld’s total staff – hit the bricks to agitate for higher wages. Cambodia Daily reported that the action was instigated by what the strikers viewed as the unwarranted firing of two employees from the casino’s food and beverage section and two more from the VIP section. The four staffers were ordered sacked by three unpopular managers, the removal of which the strikers want to see before they’ll return to work. Sok Narith, VP of the Cambodian Tourism and Service Workers Federation, told the Phnom Penh Post that casino managers were doing their best to fill in as dealers. NagaWorld had previously earned the ire of workers in 2009, when it was accused of breaching the Labor Law by arbitrarily firing 14 union representatives.


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