Cirsa Q1 revenue growth bucks LatAm forex woes

Cirsa Q1 revenue growth bucks LatAm forex woes

Spanish gaming giant Cirsa Gaming Corp. reported 0.7 percent profit growth despite the devaluation of Latin American currencies against the Euro.

Cirsa Q1 revenue growth bucks LatAm forex woesIn a regulatory filing, Cirsa reported operating profit of €106.8 million (US$125 million) in the first quarter of 2018, higher than the €106 million ($124.12 million) it cashed during the same period last year. Operating revenue rose nearly 1 percent to €417.15 million ($488.45 million).

The firm reported a strong showing in all of the countries in which it operates, including the 23 new casinos it incorporated in Peru, Panama, Colombia and Costa Rica.

However, growth was muted by the strong currency devaluation and increased fiscal pressure in Latin American countries, especially in Argentina. Cirsa’s total net debt rose to €955.9 million ($1.12 billion).

“The growth of all countries in local currency has enabled the mitigation of the negative effect of the aforementioned exchange rates,” Cirsa said in a statement.

Cirsa’s empire includes 147 casinos, over 75,000 recreational machines, 70 bingo halls, 178 gaming halls and 2,000 sports betting outlets in Spain, Italy and Latin America. It also offers online gambling in Spain, Colombia and Panama.

Except for the Argentinian business, Cirsa is now operated by U.S. private equity firm Blackstone Capital, which acquired Cirsa in April.

The two companies agreed that Blackstone will acquire Cirsa’s casino, bingo and sports betting operations in Spain, Italy and Latin America. Cirsa’s Argentinean business will exist as a separate entity under the rule of its founder Manuel Lao Hernandez.

Cirsa’s acquisition value was somewhere in between €2 billion ($2.34 billion) and €2.5 billion ($2.93 billion) through a hedge fund bidding war that began in February 2018. Cirsa CEO Joaquim Agut replaced Hernandez as the company’s new chairman following the latter’s exit.