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Cambodia – Entertainment Gaming Asia sees marked first quarter improvement

By - 15 May 2015

Entertainment Gaming Asia has reported revenues of $8.3m for the first quarter of 2015, an increase of 76 per cent compared to $4.7m in the first quarter of 2014 due to increases in both the gaming operations and gaming products business divisions.

Gaming operations revenue was $4m for the first quarter of 2015, an increase of three per cent compared to $3.9m in the first quarter of 2014 due to improvement in the Cambodia operations partially offset by a decline in the Philippines operations. Average consolidated daily net win per unit was $108 for the first quarter of 2015, an increase of seven per cent compared to $101 in the first quarter of 2014 due to the higher revenue and a four per cent reduction in the total operating machine base.

Cambodia average daily net win per unit was $128 for the first quarter of 2015, an increase of nine per cent compared to $117 in the prior year period primarily due to improved performance at NagaWorld. NagaWorld average daily net win per unit increased to $198 for the first quarter of 2015 compared to $175 in the prior year period primarily due to an increase in VIP player traffic partially offset by higher jackpots in the first quarter of 2015.

Philippines average daily net win per unit was $68 for the first quarter of 2015, a decrease of four per cent compared to $71 in the prior year period. The decrease was primarily due to increased competition from new integrated casino resorts in Manila, one of which opened in March 2013 and another which soft opened in December 2014. While Philippines average daily net win per unit declined on a year-over-year basis, it improved from $65 in the prior sequential quarter as the Company continued its proactive marketing strategies to stabilise performance in an increasingly competitive landscape.
Revenue from gaming products was $4.3m for the first quarter of 2015 compared to $811,000 in the first quarter of 2014. The increase was primarily a result of higher sales of gaming chips and plaques due to strong reorder levels from existing customers. The Company achieved a gross profit for this division for the first quarter of 2015 compared to a gross margin loss in the prior year period. The gross margin increase was primarily due to substantially higher production volumes, continuing efforts to improve production efficiencies and the outsourcing of certain production processes for two orders with short lead times as demand exceeded the Company’s existing capacity during the period.

Entertainment Gaming Asia reported adjusted EBITDA of $2.4min the first quarter of 2015 compared to $960,000 in the first quarter of 2014.

The company reported net income of $570,000, or $0.04 per share, on a weighted average diluted share count of 14.5 million shares for the first quarter of 2015. This compared to a net loss of $1.0 million, or $0.14 per share, on a weighted average diluted share count of 7.5 million shares for the first quarter of 2014. The first quarter of 2014 net loss included a net loss of $157,000 from discontinued operations related to Dreamworld Pailin. Excluding the discontinued operations, the Company reported a net loss from continuing operations of $873,000, or $0.12 per share, for the first quarter of 2014.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, said: “We are pleased to report a positive net profit for the first quarter of 2015. The primary drivers of our performance were the significant improvements in gaming products sales and gross margin as well as the growth in gaming operations revenue. Gaming products benefited from an attractive reorder pipeline from existing customers and our continuing efforts to improve profitability while growth in gaming operations was largely due to solid performance from NagaWorld.

We are focused on continuing to improve our operating performance and securing new projects that will drive long-term growth and earnings visibility for the Company. With a cash position of over $20.0 million and as an indirect, majority-owned subsidiary of Melco International Development Limited, a leader in Asian gaming, we believe we have greatly enhanced our financial flexibility and improved our access to a broader pool of potential growth opportunities in growing gaming markets in Asia. We are actively seeking new projects that would further enhance our existing business lines and provide the opportunity to add new ones.”

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