Investors in Philippine-based gaming technology provider PhilWeb are seeing the aftermath of Philippine president Rodrigo Duterte’s war on eGames cafes now that the dust has finally settled.
In a disclosure to the Philippines Stock Exchange on Monday, PhilWeb announced in its annual report that its net income plunged 134.2 percent in 2016 due to the expiration and non-renewal of its Intellectual Property License and Management Agreement (IPLMA).
Philweb’s lPLMA expired last July 11, more than a week after President Rodrigo Duterte assumed power in the Southeast Asian island nation. By that time, Duterte declared that “online gambling must stop.”
The online gambling firm reported that its net income dropped from PHP869.6 million (US$17.55 million) in 2015 to PHP297.7 million ($6.01 million) in the period ending December 31, 2016. Its total revenues also dropped by 38.9 percent to PHP1.01 billion ($20.39 million) in 2016 from PHP1.6 billion ($32.30 million) in 2015.
For the year ended December 31, 2016, the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) also decreased by 51.7 percent to PHP580.4 million in 2016 from P1.2 billion in the previous year.
“The Parent Company’s IPLMA with PAGCOR has expired on July 11, 2016 and was extended only until August 10, 2016. The Parent Company winded down its operations as a service provider to PeGs. These conditions among others, indicate the existence of material uncertainty which may case significant doubt on the Group’s ability to continue as a going concern,” the company said. “To ensure the continued viability of the Group, steps are being taken by the management as discussed in Note 1 to the consolidated financial statements. The validity of these assumptions is dependent on the Group’s ability to meet its financing requirements on a continuing basis and the success of its future operations.”
In early March, PhilWeb President and Corporate Information Officer Dennis Valdes told CalvinAyre.com that the company remains bullish that it will be able to renew their license with PAGCOR in the near future, after it expired in August 2016.
For now, PhilWeb awaits the announcement of PAGCOR to bid out the service contract for its online gaming operations, particularly for the eGames network.