Despite drop, CEO calls numbers ‘solid’; Elixir also posts losses

ELECTRONIC gaming machine provider Elixir Gaming Technologies Inc has posted its ninth straight quarterly loss, but is seeing gradual improvement in its results thanks to its strong alliance with Phnom Penh’s NagaWorld Hotel and Casino, the company said.

The American Stock Exchange-listed Elixir posted a US$1.7 million net loss for the first quarter of 2010, an improvement on a $2.6 million loss in the fourth quarter and $6.2 million loss in the first quarter of last year, according to results released to AMEX Thursday.

The gaming machine operator has not yet managed to fully capitalise on the success of what it repeatedly hails as the driver of its revenue growth, the Hong Kong-listed NagaWorld, which holds a monopoly on gaming in Phnom Penh.

NagaWorld holds an exclusive licence to operate a casino within a 200-kilometre radius of the capital.

NagaWorld posted a $25.5 million profit for 2009, a 36.3 percent drop from its $40 million profit for 2008, according to its annual report released April 26.

In a statement, Naga-World’s CEO and Chairman Timothy McNally described the figures as “solid results” made in a “challenging” economic climate.

Elixir CEO and Chairman Clarence Chung has repeatedly singled out operations at NagaWorld over the last few quarters as a “strong contributor to the financial performance”.

Indeed, Elixir’s fiscal fortunes have improved quarter-on-quarter since entering the operator-partner relationship with the casino in early 2009.

In results released Thursday, Elixir said adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and non-cash charges) was $1.3 million for the first quarter of 2010, up 64 percent from the previous quarter, and a turnaround from the negative adjusted EBITDA of $2.6 million for Q1 2009.

The gaming operator had $5.1 million in cash as of March 31, up from the $4.2 million on December 31, 2009.

“The increase in cash balance was the result of strong cash flow from our Naga operations,” Elixir Chief Accounting Officer Andy Tsui said in results webcast on Thursday.

Elixir plans to increase its total gaming seats in NagaWorld to 640 by July this year, up from 200 seats in January last year.

It currently has 590 seats in the Phnom Penh location, and 897 seats across six venues in the Philippines.

It recently signed an agreement with Cambodian casino-owner Grand Golden Co to place 60 seats at the new Grand Golden casino in Kampong Cham province near the Vietnam border. The deal is expected to be completed by November 2010.