Entertainment Gaming Asia optimistic despite Dreamworld Pailin closure

For the three months ending on December 31, Elixir Gaming Technologies (EGT) revenue rose 63% year-on-year to $8.3 million, primarily due to $4 million in gaming chip and plaque orders from two Philippines casino operators – Melco Crown Entertainment andBloomberry Resorts. Gaming products revenue was $4.2 million in the fourth quarter, up from $729 thousand in the same period the previous year.

Gaming operations revenue fell 7% to $4.1 million. EGT’s slot machine operations in the Philippines fell 16% to $648 thousand thanks to increased competition from those new Entertainment City Manila casinos to which EGT supplies chips.

Cambodian gaming operations fell 3% to $3.2 ,million. EGT operates the Dreamworld Poipet slots hall on Cambodia’s border with Thailand and supplies slots to NagaWorld, NagaCorp’s flagship casino property in Phnom Penh. The Poipet property saw lower player traffic while NagaWorld enjoyed increased VIP traffic and improved daily net win per unit.

EGT’s Q4 earnings fell by half to $369 thousand while reporting a net loss of $1.5 million. The company blamed the red ink on decreased gaming operations plus “production inefficiencies” and “temporary machinery issues” related to the manufacturing of casino plaques.

For 2014 as a whole, revenue was up 4% to $22.4 million, with gaming operations down 9% to $16.4 million while gaming products nearly doubled to $6 million. The year saw EGT shutter its underperforming Dreamworld Pailin casino after two years of fiscal futility. The closure contributed $325k to EGT’s net loss of $2.8m in 2014.

The year also saw Lawrence Ho’s Melco International Development take a controlling interest in EGT. On a call with analysts, EGT CEO Clarence Chung said EGT’s new status as a Melco offshoot allowed the company to “leverage relationships and industry expertise” to access “a broader pool of potential growth opportunities.”

Chung said EGT plans to pursue new gaming projects, including placing slots in casinos and hotels in “certain markets in Indo-China.” Despite the Pailin fiasco, which Chung said had provided “valuable experience,” EGT hasn’t given up on expanding its Dreamworld casino brand. Chung said future Dreamworld projects in Asian markets would focus on “projects that are relatively larger in size.”