Gaming tax hike in Italy impacted the slots' Q1 Ebitda by USD 2.6 M

Cirsa's operating profit increases by 8% in the first quarter

The casinos division closed the first quarter with a significant improvement in its results, following the strict implementation of foreseen plans in all territories where the company operates.
2019-06-04
Reading time 2:44 min
Operating income amounted to USD 426.4 million, up 8.5% from the same period in 2018. The Bingo halls division in Spain improved its revenue driven by remodeling and expansion of the product in Andalusia, improvements made in the application of Dynamic Bingo in Madrid, among other highlights. The Industrial division B2B – UNIDESA showed positive figures in the HORECA channel thanks to the new On The Rocks model.

Cirsa generated an operating profit of €103.4 million in the first quarter of 2019, that is, an increase of an 8% over the same period in 2018. Operating income amounted to €379 million, up 8.5% from the same period in 2018.

The casinos division closed the first quarter with a significant improvement in its results, following the strict implementation of foreseen plans in all territories where the company operates. Highlights were the successful re-launch in the fourth quarter of 2018 of the Jaragua Casino in the Dominican Republic and the new El Fuerte, El Dorado and Aguadulce halls in Panama, as well as the start-up of 14 expansion and remodeling projects in various casinos.

The slots division in Spain continued to consolidate the positive revenue trend, with an improvement in the first quarter of 2019 based on both operating and commercial efficiency and product management, particularly with the successful introduction of the On The Rocks and Galaxy models, developed by the B2B -UNIDESA industrial division. Net operating revenues grew by 6.0% and non IFRS16 Ebitda decreased by 2.1% from first quarter 2018, due to the gaming tax increase in Italy, which impacted Cirsa’s first quarter Ebitda by €2.6 million.

In Italy, the company maintains its leadership in machine revenue in both AWP machines and video lottery terminals (VLTs), mainly due to the optimization of the product mix and a tough selection of points of sale in the HORECA and arcades channels. Thus, global revenue continued to grow even though its results were reduced by the tax increases approved by the Italian government in 2018.

The Bingo halls division in Spain managed to significantly improve its revenue thanks, among others, to the project to remodel and expand the product in the Andalusia halls, the improvements made in the application of Dynamic Bingo in Madrid, and the replacement of the Binjocs machines by Univers in Catalonia, a model developed by UNIDESA.

In Mexico, the improvement of revenue in all existing business activities in the country was noticeable, as well as the increase in the customer base.

The Industrial division B2B – UNIDESA maintained its leadership in the HORECA channel thanks to the new On The Rocks model. Also important was the successful introduction of Univers in arcades and bingo halls in Catalonia, and the continued sales of the SENSATION model for arcades throughout Spain. The Interactive area marked the good results of the Forward Systems for arcade management, recently introduced, both in casinos in Peru and in arcades in Spain.

In the first quarter of 2019, arcades continued the trend of recent quarters, improving on the 2018 results. A highlight was the gradual introduction of the SENSATION machine from UNIDESA. In the same period, the new TOKA image and concept continued to be implemented in various arcades, as well as the B2B – UNIDESA’s Forward Systems management solution.

Sportium significantly increased net revenue in the first quarter of the year in all territories, as did the Digital channel. Having completed deployment in all autonomous regions in Spain, organic growth comes hand-in-hand with technological improvements, with new functionalities on the Sportplay and Sportbox terminals, and exclusive content such as horse and greyhounds races on international racetracks and dog tracks.

See full report of Cirsa's first quarter results.

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