Gaming operator Entertainment Gaming Asia (EGA) has turned a profit after two years of losses partly due to an unsuccessful casino venture in Pailin, according to the NASDAQ-listed firm’s first-quarter results.
Net income rose to $570,000 for 2015’s first quarter, up from a $1.03 million loss for the same period last year. Total revenues stood at $8.3 million, a 76 per cent increase from $4.7 million last year.
The firm chalked its results up to increasing reorders for gaming products, including poker chips and gaming plaques, and increased VIP traffic to NagaWorld, where it operates 670 electronic gaming machines.
“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,” CEO Clarence Chung said in a statement.
Growth in EGA’s Cambodian gaming operations increased 6 per cent compared to 2014’s first quarter, making up for an 8 per cent loss in revenue from the Philippines, where two casinos have opened since March 2013 in Manila.
Gaming analyst Michael Ting of CIMB said NagaWorld would likely see continuing VIP revenue growth, although they were starting from a “low base”.
“As time goes on, Naga should see a steady increase in China-based VIP customers. Again from a low base.”
But revenues from EGA’s 1,600 slot machines across Cambodia and the Philippines did not contribute significantly to its positive result, nudging from $3.9 million in 2014’s first quarter to $4.01 million this year.
Instead, most of EGA’s increased revenue was due to reorders of physical gaming products, which more than quadrupled to $4.2 million in 2015’s first quarter, while the firm has since dropped its unprofitable Dreamworld Pailin venture.
EGA sold the casino for $500,000 in June of 2014 after an initial investment of $2.5 million when it opened in May of 2012.
“The property’s performance was negatively impacted by an insufficient level of player traffic and the high costs associated with acquiring a quality player base in this market,” the firm wrote in its 2014 annual report.
A net loss of $157,000 was recorded in the first quarter of 2014 from “discontinued operations related to Dreamworld Pailin”. No further losses from the ill-fated venture were recorded in 2015.
Despite Dreamworld’s loss, the company said it remained on the lookout for further expansion opportunities.
“We are actively seeking new projects that would further enhance our existing business lines and provide the opportunity to add new ones”, Chung said in a statement.
EGA could not be reached for comment.