Casino operator Entertainment Gaming Asia (EGA) has continued its downward trajectory in 2014, recording a 29% revenue decline in the first three months of the year. EGA, which operates Dreamworld brand casino and slot halls in Cambodia and supplies electronic gaming machines to NagaCorp’s NagaWorld casino in Phnom Penh and slot halls in the Philippines, generated revenue of $4.9m in Q1. Earnings fell from $1.9m last year to just $862k, resulting in a net loss of $1m for the quarter.
EGA’s gaming operations revenue fell 25% to $4.1m. Slots operations accounted for $3.9m of this sum, down 12% year-on-year, which the company attributes to lower average daily net win at NagaWorld and “increased competition” in the Philippines. Casino revenue from Dreamworld Pailin on the border with Thailand fell nearly 80% to $216k after the company cancelled its deals with high-cost tour group promoters and switched to a table-leasing revenue model in Q3. In January, EGA announced it had written off $2.5m due to the declines at Dreamworld Pailin, which opened in May 2012.
EGA CEO Clarence Chung insisted that Dreamworld Pailin’s operating losses had narrowed in Q1 but said ongoing political tensions in Thailand weren’t helping matters. While EGA remains committed to righting the ship, Chung said the company was “actively seeking new projects in Indo-China and other growing gaming markets in Asia.”
Revenue from EGA’s chip-making subsidiary Dolphin Products fell 43% to $811k this quarter but the company just announced two deals to supply chips and plaques to casinos in the Philippines’ Entertainment City Manila development. The first, a resupply deal with Bloomberry Resorts’ Solaire Resort & Casino, is worth $700k, which EGA expects to record as revenue in Q3 2014.
The second deal, worth $3.3m, is with Melco Crown Entertainment’s City of Dreams Manila, which is scheduled to open later this year. Not for nothing, but Hong Kong’s Melco International Ltd., which holds two-thirds of the Melco Crown joint venture, also owns 38% of EGA, so this is a bit like Melco boss Lawrence Ho giving a leg up to a struggling sibling.