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Latin America – Cirsa’s Lat Am casinos hit by Euro devaluation

By - 1 June 2018

Spanish gambling company Cirsa has reported an operating profit in the first quarter of 2018 of €106.8m, 0.7 per cent more than the same period in 2017.

The improvement was despite the unfavourable impact of €16.1m, as a result of the devaluation against the euro of all Latin American currencies.

Operating income stood at €423.5m, slightly below the €424.2m declared in the first quarter of 2017, although, according to the company, they are in line with the objectives of its strategic plan. Cirsa added that revenues measured in local currency had grown in all countries, which had mitigated in part the effects of currency devaluation.

Regarding the activity in the first quarter, Cirsa highlighted the incorporation of 23 new casinos in Peru, Panama, Colombia and Costa Rica, which have contributed to offset the currency devaluation as well as increased greater fiscal pressure, especially in Argentina. The company also highlighted the growth in revenues from recreational machines in Spain, driven by the new model developed by its subsidiary Unidesa. In the first three months of the year, Cirsa’s other business units also recorded a positive evolution, such as the B2B area related to the design and production of machines for bars, bingo halls and casinos, its gaming halls and Sportium.

Sportium has greatly increased its presence nationwide with the deployment of over 250 new points of sale which was the result of recent regulation in Andalusia and the Balearic Islands. The sports betting division continues with significant increases in its turnover, both in gross and net revenues. The Sportium brand has also started its activities in Colombia with the opening of its first points of sale and the start-up of its digital offer.

In Mexico, the company highlighted the complete integration of the casinos of the port city of Manzanillo and the casino in Vallarta, acquired in 2017, as well as the positive evolution of the five existing business areas in the country: slots, tables, sports betting, traditional bingo and Food and Beverages. Its Bingo division in Spain meanwhile continued with its positive trend in both traditional bingo and adjoining gaming rooms thanks to the increase number of visitors. Meanwhile in Italy, Cirsa maintained its position as market leader when it came to collection per machine in both AWP machines and VLT’s.

The results come after the Spanish gambling giant officially notified the Panamanian authorities and other countries of the sale of its casinos, to the Private equity firm Blackstone Group. The marketing and communication department in Spain informed Panama America that they have already made the corresponding arrangements to formalise the operation in Panama and with respect to the name, they said that until now there is no plan to change it.

Both companies have reached agreement on a deal under which Blackstone, one of the world’s leading investment firms, will acquire Cirsa’s casino, bingo and sports betting operations in Spain, Italy and Latin America, with the exception of the company’s operations in Argentina which will operate as a separate entity under Cirsa founder Manuel Lao Hernandez. The cost of the acquisition was not revealed although Cirsa had previously said it wanted between €2bn and €2.5bn. Joaquim Agut, CEO of Cirsa since 2006, will assume the chairmanship of the Group.

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