Gaming operator Entertainment Gaming Asia Inc. (EGA), reported a net loss of $385k in the second quarter of 2013, an improvement over the $2.5m loss in Q1 (although $2.2m of that red ink was due to the closure of a gaming chip and plaque manufacturing plant in Australia). Revenue for the quarter totaled $5.85m, off 5% from last year although H1 numbers were up $885k. As of June 30, the company boasted a cash balance of $4.8m and carried zero debt.
The overwhelming majority ($5.7m) of EGA’s revenue came via its gaming operations, and the majority of this ($3.7m) came via EGA’s supply of slot machines to NagaCorp’s NagaWorld facility in Phnom Penh. An additional $300k came from EGA’s latest Dreamworld-branded slot hall in the Poipet free economic zone, which opened in mid-May. The $7.5m Dreamworld Poipet houses approximately 300 electronic gaming machine (EGM) seats, and the company says the venue’s low operating cost structure requires average win per machine per day of just $25 to break even. EGA’s slot operations in the Philippines added $800k to the revenue pie, down from $1m in Q2 2012.
Dreamworld Pailin, the casino in western Cambodia that EGA opened in May 2012, contributed a further $907k in revenue, down from $1.1m in Q1 2013. EGA is in the process of refocusing the Pailin property on the VIP market, with plans to reduce the number of gaming tables in operation from 26 to 16. The extra floor space will be taken up by the increasingly popular ‘stadium’ style semi-live electronic tables, which offer up to 30 seats apiece. These will be directed at mass-market baccarat players, while the traditional tables will cater to the VIPs. EGA is also adding five new VIP promoters to its junket program to help capture more of the high-roller market, while reducing its emphasis on mass-market tour groups in a bid to lower Pailin’s operating costs by 30-40%.
EGA’s temporarily slimmed down Dolphin gaming products division saw revenue fall from $978k in Q2 2012 to just $162k this year, but EGA says its new manufacturing facility in Hong Kong has enough orders in the pipeline that the factory is running 24 hours/day. EGA expects to book $2m in revenue in Q3 via these orders, which are destined for gaming joints in Australia and the Philippines. CEO Clarence Chung expects the gaming products division will keep right on churning out product as more Asian jurisdictions hop on the casino gravy train.
