OEG: consolidated unaudited results for Q4 and 12m 2016 - part 2

OEG: consolidated unaudited results for Q4 and 12m 2016 - part 2

Posted on 28.02.2017

Overview by markets

Estonia

The sales revenues before gaming taxes of Estonian segment for 2016 amounted to EUR 45.4 million (+9.8 m€, +27.6%), EBITDA to EUR 23.1 million (+17.1 m€, +285.3%) and operating profit to EUR 19.7 million (+15.6 m€, +382.5%). Gaming revenue before gaming taxes increased 16.5% y-o-y amounting to EUR 39.2 million. Sales revenues increased partially due to hotel sales revenues. EBITDA and operating profit increased largely due to the profit from the hotel real estate sales transaction in amount of EUR 17.8 million.

At the end of 2016, there were 24 Olympic casinos with 990 slot machines, 36 electronic roulette terminals, 24 gaming tables and 22 poker tournament tables operating in Estonia. As at 31 December 2016 Estonian operations employed 715 people.

Latvia

The sales revenues before gaming taxes of Latvian segment for 2016 amounted to EUR 66.2 million (+10.2 m€, +18.2%), EBITDA to EUR 27.8 million (+1.6 m€, +5.9%) and operating profit to EUR 24.1 million (+0.9 m€, +3.7%). Gaming revenue before gaming taxes increased 17.7% y‑o‑y amounting to EUR 60.6 million.

At the end of 2016, there were 54 Olympic casinos with 1,475 slot machines, 8 electronic roulette terminals, 24 gaming tables and 9 poker tournament tables operating in Latvia. As at 31 December 2016 Latvian operations employed 915 people.

Lithuania

The sales revenues before gaming taxes of Lithuanian segment for 2016 amounted to EUR 25.3 million (+3.3 m€, +14.8%), EBITDA to EUR 2.3 million (-1.0 m€, -30.3%) and operating profit to EUR 0.7 million (-1.4 m€, -65.6%). Gaming revenue before gaming taxes increased 15.5% y-o-y amounting to EUR 24.4 million.

At the end of Q4 2016, there were 18 Olympic casinos with 543 slot machines, 8 electronic roulette terminals, 59 gaming tables and 2 poker tournament tables and 31 betting shops operating in Lithuania. As at 31 December 2016 Lithuanian operations employed 750 people.

Slovakia

The sales revenues before gaming taxes of Slovak segment for 2016 amounted to EUR 16.5 million (+0.2 m€, +1.2%), EBITDA to EUR 1.1 million (+0.2 m€, +27.4%) and operating profit to EUR 0.04 million (+0.13 m€). Gaming revenue before gaming taxes increased 1.4% y-o-y amounting to EUR 14.7 million.

At the end of 2016, there were 8 Olympic casinos with 291 slot machines, 36 electronic roulette terminals, 44 gaming tables and 21 poker tournament tables operating in Slovakia. As at 31 December 2016 Slovak operations employed 324 people.

Italy

The sales revenues before gaming taxes of Italian segment for 2016 amounted to EUR 26.8 million (+4.8 m€, +21.6%), EBITDA to EUR 1.0 million (+0.4 m€, +58.7%) and operating profit to EUR 0.6 million (+0.4 m€, +215.5%). Gaming revenue before gaming taxes increased 21.7% y-o-y amounting to EUR 26.6 million.

At the end of 2016, there were 15 VLT slot casinos with 539 slot machines operating in Italy. As at 31 December 2016 Italian operations employed 88 people.

Malta

The sales revenues before gaming taxes of Maltese segment for 2016 amounted to EUR 11.2 million (+10.9 m€, +3,738.3%), EBITDA to EUR -0.1 million (+0.3 m€) and operating loss to EUR -1.2 million (-0.8 m€). Gaming revenue before gaming taxes increased 3752% y-o-y amounting to EUR 11.0 million.

At the end 2016, there was 1 casino with 285 slot machines, 18 electronic roulette terminals, 19 gaming tables and 10 poker tournament tables operating in Malta. As at 31 December 2016 Maltese operations employed 209 people.

Discontinued operations

Poland

The sales revenues before gaming taxes of Polish segment for 2016 amounted to EUR 13.6 million (-10.5 m€, -43.6%), EBITDA to EUR 0.03 million (-3.1 m€, -99.2%) and operating loss to EUR 7.8 million (-10.5 m€, -396.7%). Gaming revenue before gaming taxes decreased 43.8% y-o-y amounting to EUR 13.3 million. Operating loss was caused by the impairment of goodwill and assets due to freezing active operations.

Polish flagship casino was closed on 23 September 2016 due to expiration of location specific activity license. As at 31 December 2016 Polish operations employed 23 people. The Group remains to be interested in continuing its operations in the Polish market and plans to participate in the upcoming public tenders for the licenses. The main purpose of freezing the active operations is to minimise the everyday costs and expenses.

Belarus

The sales revenues before gaming taxes of Belarus segment for 2016 amounted to EUR 0.2 million (-0.6 m€, -76.7%), EBITDA to EUR -1.5 million (-1.1 m€) and operating loss to EUR 1.5 million (-1.1 m€). The EBITDA and operating loss include EUR 1.3 million of currency translation losses recycled from other comprehensive income to the income statement.

The Group has announced of its decision to exit Belarus gaming market due to the inefficient operations caused by the macroeconomic situation and poor prospects to increase profitability in Belarus.

Financial position

As at 31 December 2016, the total assets of the Group amounted to EUR 152.7 million, down 5.9% or EUR 9.6 million compared to the same period a year ago.

Current assets totalled EUR 45.0 million or 29.5% of total assets, and non-current assets EUR 107.7 million or 70.5% of total assets. The liabilities amounted to EUR 22.8 million and equity to EUR 129.9 million. The largest liabilities included suppliers payables and advances (7.7 m€), tax liabilities (6.1 m€) and payables to employees (4.9 m€).

Investments

Within 2016, the Group's expenditures on property, plant and equipment totalled EUR 33.7 million (+1.1 m€, +3.4%), of which EUR 27.5 million was invested into construction of hotel and construction and reconstruction of casinos (+5.9 m€, +27.3%) and EUR 4.8 million into new gaming equipment (-5.5 m€, -53.4%).

Cash flows

Group's 2016 cash flows generated from operating activities amounted to EUR 34.5 million (-2.5 m€) and cash flows used in investing activities to EUR -25.3 million (+8.9 m€). Financing cash flows amounted to EUR -6.0 million (+2.1 m€). Net cash flows totalled EUR 3.2 million (+8.6 m€).

Staff

As at 31 December 2016 Group employed 3,024 people, up by 359 y-o-y mostly due to expansion in Estonia, Latvia, Lithuania and Malta.

Within 2016, total personnel expenses amounted to EUR 53.5 million (+9.8 m€, +22.3%). For 2016, the members of the Management Board and Supervisory Board of all Group entities were paid remuneration and benefits including social security taxes in the amount of EUR 1,286 thousand (EUR 1,006 thousand for 2015) and EUR 149 thousand (EUR 149 thousand for 2015), respectively.

Consolidated statement of financial position

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(EUR thousands)		31.12.2016	31.12.2015
ASSETS
Current assets
Cash and cash equivalents		37,933	34,710
Financial investments		99	1,835
Receivables and prepayments		4,552	5,537
Prepaid income tax		913	551
Inventories		1,532	1,366
Total current assets		45,029	43,999
Non-current assets
Deferred tax assets		426	801
Financial investments		4,988	3,512
Other long-term receivables and prepayments		776	914
Investment property		295	288
Property, plant and equipment		51,250	58,877
Intangible assets		49,932	53,942
Total non-current assets		107,667	118,334
TOTAL ASSETS		152,696	162,333