Key performance indicators
Discontinued and continuing operations combined (in millions of euros)
| 6m 2011 | 6m 2010 | |
| Revenue | 61.9 | 52.9 |
| EBITDA | 15.0 | 8.7 |
| Operating profit | 5.7 | -0.6 |
| Net profit / (loss) | 4.4 | -1.2 |
| EBITDA margin | 24.2% | 16.4% |
| Operating margin | 9.2% | -1.1% |
| Net margin | 7.1% | -2.3% |
| Equity ratio | 68.0% | 77.6% |
| Number of casinos at period-end | 63 | 64 |
| Casino area (m2) at period-end | 23,076 | 25,409 |
| Number of slot machines at period-end | 2,441 | 2,475 |
| Number of gaming tables at period-end | 173 | 168 |
Underlying formulas:
o EBITDA = earnings before financial expenses, taxes, depreciation and amortisation and impairment losses
o Operating profit = profit before financial expenses and taxes
o Net profit = net profit for the period less non-controlling interests
o EBITDA margin = EBITDA / revenue
o Operating margin = operating profit / revenue
o Net margin = net profit / revenue
o Equity ratio = equity / total assets
Overview of the Group’s key events and developments in H1 2011:
- In Q2 2011 the consolidated net profit after corporate income tax for the Group totalled 4.2 million euros. In Q2 2010, the Group incurred a net loss of 0.8 million euros.
- The efficiency of the Group’s business operations improved. In Q2 2011, the Group’s income from gaming transactions and revenues totalled 28.7 million euros, i.e. 7.9% more than for Q2 2010. The number of casinos in operation declined by 1 casinos or 1.5% period-over-period.
- As planned, the Group increased its market share. At Q2 2011, the Group’s market share was 55.2% in Estonia, 20.3% in Latvia and 70.5% in Lithuania. At Q2 2010, its market share was 51.5% in Estonia, 19% in Latvia and 62% in Lithuania.
- Olympic Entertainment Group AS signed share purchase agreement on 30 April 2011 with an Israeli entrepreneur for selling all the shares in Romanian subsidiaries Olympic Casino Bucharest S.R.L, Muntenia Food and Beverage S.R.L. and Olympic Exchange S.R.L. As of 30 June 2011 shares of Romanian subsidiaries have been registered to the buyer.
- On 27 May 2011, the decrease of share capital and the conversion of share capital of Olympic Entertainment Group AS into euros were entered into the Commercial Register based on the resolutions adopted by the General Meeting of Shareholders of the Company held on 5 May 2011. The new amount of the registered share capital of the Company is 90,797,703 euros, which is divided into 151,329,505 ordinary shares with the nominal value of 0.6 euros. According to the resolutions of the General Meeting of Shareholders held on 5 May 2011, the share capital of the Company will be further reduced by 9,079,770.30 euros from 90,797,703 euros to 81,717,932.70 euros by reducing the calculated value of the shares. The referred resolution entered into force on the day following to the day, when the reduction of the share capital in relation to the conversion into euros and the amendment of the Articles of Association were entered into the Commercial Register, (i.e. on 28 May 2011) pursuant to the resolutions of the General Meeting.
In H1 2011, the Group’s consolidated sales revenue totalled 57.8 million euros and the revenue totalled 61.9 million euros which is 17.0% more than the total revenue of 52.9 million euros earned in H1 2010. The Group’s EBITDA increased by 8.7 million euros from H1 2010 to15.0 million euros in H1 2011. In H1 2011, the operating profit totalled 5.7 million euros, in H1 2010, the operating loss totalled 0.6 million euros.
In H1 2011, gaming operations accounted for 87% and other revenue 13% of the Group’s consolidated revenue, the respective percentages for H1 2010 were 93% and 7%.
External sales revenue by segments, continuing operations
| (thousands of euros) | Q2 2011 | Change | Percentage | Q2 2010 | Percentage |
| Estonia | 7,218 | 10.2% | 25.1% | 6,549 | 24.9% |
| Latvia | 6,865 | 23.4% | 23.9% | 5,562 | 21.2% |
| Lithuania | 4,341 | -3.8% | 15.1% | 4,514 | 17.2% |
| Poland | 6,458 | -5.2% | 22.5% | 6,811 | 25.9% |
| Slovakia | 3,067 | 49.2% | 10.7% | 2,056 | 7.8% |
| Belarus | 782 | 4.3% | 2.7% | 749 | 2.9% |
| Total | 28,731 | 9.5% | 100.0% | 26,241 | 100.0% |
| (thousands of euros) | 6m 2011 | Change | Percentage | 6m 2010 | Percentage |
| Estonia | 13,708 | 8.0% | 24.1% | 12,695 | 24.8% |
| Latvia | 13,276 | 18.1% | 23.3% | 11,243 | 21.9% |
| Lithuania | 8,757 | 2.8% | 15.4% | 8,517 | 16.6% |
| Poland | 13,981 | 5.5% | 24.6% | 13,246 | 25.9% |
| Slovakia | 5,499 | 32.6% | 9.7% | 4,148 | 8.1% |
| Belarus | 1,660 | 19.1% | 2.9% | 1,393 | 2.7% |
| Total | 56,881 | 11.0% | 100.0% | 51,242 | 100.0% |
At the end of Q2 2011, the Group had 63 casinos, with the total area of 23,076 m². At the end of Q2 2010, the number of the Group’s casinos was 64, and their total area was 25,409 m².
Number of casinos by segment
| 30.06.2011 | 30.06.2010 | |
| Estonia | 17 | 17 |
| Latvia | 21 | 21 |
| Lithuania | 11 | 10 |
| Poland | 6 | 7 |
| Slovakia | 3 | 2 |
| Belarus | 5 | 5 |
| Romania | 0 | 2 |
| Total | 63 | 64 |
In H1 2011, the Group’s consolidated operating expenses before depreciation, amortisation and impairment increased by 6.1% or 2.7 million euros as compared to the respective expenses in H1 2010. Operating licences and gaming taxes increased the most as compared to 2010, 6.3% or 0.8 million euros, staff costs by 2.7% or 0.4 million euros and maintenance costs of gaming areas by 13.5% or 0.3 million euros.
Staff costs with social security taxes made up the largest share of the Group’s operating expenses before depreciation, amortisation and impairment losses, i.e. 15.1 million euros, followed by gaming tax expenses of 13.1 million euros, rental expenses of 4.9 million euros and marketing expenses of 4.4 million euros.
In H1 2011, the consolidated net profit after tax totalled 4.4 million euros. In H1 2010, the net loss after tax totalled 1.1 million euros.
Overview by market
Estonian segment
In H1 2011, external revenue of the Estonian segment totalled 15.7 million euros, of which the gaming revenue 12.4 million euros and other income totalled 3.3 million euros. External revenue of the Estonian segment increased by 22.0% as compared to H1 2010. The increase in the gaming market in Estonia was 0.1% in H1 2011 as compared to H1 2010. The market share of Olympic Casino Eesti AS in the Estonian gaming market was 55.2% at the end of H1 2011. At the end of H1 2010, the market share of Olympic Casino Eesti AS was 51.5%.
In H1 2011, the EBITDA of the Estonian segment was 4.3 million euros and the operating profit was 2.3 million euros. In H1 2010, the EBITDA of the Estonian segment totalled 2.1 million euros and the operating loss totalled 0.2 million euros.
At the end of H1 2011, there were 17 Olympic casinos with 698 slot machines and 20 gaming tables in operation in Estonia.
Latvian segment
In H1 2011, external revenue of the Latvian segment totalled 13.3 million euros, of which the gaming revenue 12.2 million euros and other income totalled 1.1 million euros. External revenue of the Latvian segment increased by 17.7% as compared to H1 2010. The increase in the gaming market in Latvia was 14.6% in H1 2011 as compared to H1 2010. The market share of Olympic Casino Latvia SIA in the Latvian gaming market was 20.3% at the end of H1 2011. At the end of H1 2010, the market share of Olympic Casino Latvia SIA was 19%.
In H1 2011, the EBITDA of the Latvian segment was 5.0 million euros and the operating profit was 3.3 million euros. In H1 2010, the EBITDA of the Latvian segment totalled 3.6 million euros and the operating profit totalled 1.5 million euros.
At the end of H1 2011, there were 21 Olympic casinos with 646 slot machines and 24 gaming tables in operation in Latvia.
Lithuanian segment
In H1 2011, external revenue of the Lithuanian segment totalled 8.8 million euros, of which the gaming revenue 8.2 million euros and other income totalled 0.6 million euros. External revenue of the Lithuanian segment increased by 3.5% as compared to H1 2010. The decline in the gaming market in Lithuania was 4.3% in H1 2011 as compared to H1 2010. The market share of Olympic Casino Group Baltija UAB in the Lithuanian gaming market was 70.5% at the end of H1 2011. At the end of H1 2010, the market share of Olympic Casino Group Baltija UAB was 62%.
In H1 2011, the EBITDA of the Lithuanian segment was 1.8 million euros and the operating profit was 0.8 million euros. In H1 2010, the EBITDA of the Lithuanian segment totalled 1.5 million euros and the operating profit totalled 0.3 million euros.
At the end of H1 2011, there were 11 Olympic casinos with 376 slot machines and 52 gaming tables in operation in Lithuania.
Polish segment
In H1 2011, external revenue of the Polish segment totalled 16.0 million euros, of which the gaming revenue 13.7 million euros and other income totalled 2.3 million euros. External revenue of the Polish segment increased by 20.3% as compared to H1 2010.
In H1 2011, the EBITDA of the Polish segment was 3.3 million euros and the operating profit was 1.2 million euros. In H1 2010, the EBITDA of the Polish segment totalled 1.4 million euros and the operating loss totalled 1.0 million euros.
At the end of H1 2011, there were 6 Olympic casinos with 344 slot machines and 46 gaming tables in operation in Poland.
Slovak segment
In H1 2011, external revenue of the Slovak segment totalled 5.5 million euros, of which the gaming revenue 5.0 million euros and other income totalled 0.5 million euros. External revenue of the Slovak segment increased by 32.5% as compared to H1 2010.
In H1 2011, the EBITDA of the Slovak segment was 1.1 million euros and the operating profit was 0.6 million euros. In H1 2010, the EBITDA of the Slovak segment totalled 0.8 million euros and the operating profit totalled 0.3 million euros.
At the end of H1 2011, there were 3 Olympic casinos with 144 slot machines and 31 gaming tables in operation in Slovakia.
Belarusian segment
In H1 2011, external revenue of the Belarusian totalled 1.7 million euros, of which the gaming revenue 1.5 million euros and other income totalled 0.2 million euros. External revenue of the Belarusian segment increased by 21.4% as compared to H1 2010.
In H1 2011, the EBITDA of the Belarusian segment was 0.3 million euros and the operating loss was 0.0 million euros. In H1 2010, the EBITDA of the Belarusian segment totalled 0.3 million euros and the operating loss totalled 0.1 million euros.
At the end of H1 2011, there were 5 Olympic casinos with 233 slot machines in operation in Belarus.
Romanian segment
Olympic Entertainment Group AS signed share purchase agreement on 30 April 2011 with an Israeli entrepreneur for selling all the shares in Romanian subsidiaries Olympic Casino Bucharest S.R.L, Muntenia Food and Beverage S.R.L. and Olympic Exchange S.R.L. As of 30 June 2011 shares of Romanian subsidiaries have been registered to the buyer.
In H1 2011, external revenue of the Romanian totalled 1.0 million euros, of which the gaming revenue 0.8 million euros and other income totalled 0.2 million euros. External revenue of the Romanian segment declined by 28.6% as compared to H1 2010.
In H1 2011, the EBITDA of the Romanian segment was -1.0 million euros and the operating loss was 2.4 million euros. In H1 2010, the EBITDA of the Romanian segment totalled -1.0 million euros and the operating loss totalled 1.5 million euros.
Financial position
At 30 June 2011, the consolidated balance sheet total of the Group was 108.2 million euros (31 December 2010: 107.7 million euros). The balance sheet total increased by 0.5% in a half-year.
Current assets accounted for 51.4 million euros or 47.5% of total assets and non-current assets for 56.8 million euros or 52.5% of total assets. Intangible assets accounted for 28.7 million euros or 50.5% of non-current assets.
At the balance sheet date, consolidated liabilities totalled 34.6 million euros and the consolidated equity amounted to 73.6 million euros. The largest liability items included the reduction of share capital liability of 15.0 million euros, borrowings of 7.8 million euros, tax liabilities of 4.3 million euros and payables to employees of 2.8 million euros.
Investments
In H1 2011, the Group’s expenditures on property, plant and equipment totalled 0.9 million euros, of which 0.2 million euros was spent on reconstruction of casinos, 0.4 million euros was spent on new gaming equipment and 0.2 million euros was spent on other property, plant and equipment.
In H1 2010, total expenditures on property, plant and equipment, and intangible assets were 2.7 million euros.
Cash flows
In H1 2011, the Group’s cash flows from operating activities were 14.2 million euros. Cash flows used in investing activities totalled 0.8 million euros and cash flows used in financing activities totalled 1.6 million euros. Net cash flows totalled 11.9 million euros.
In H1 2010, the Group’s cash flows from operating activities were 7.0 million euros. Cash flows from investing activities totalled 2.4 million euros and cash flows used in financing activities totalled 8.0 million euros. Net cash flows totalled 1.4 million euros.
Staff
At 30 June 2011, the Group employed 2,004 people (31 December 2010: 2,115): 454 in Estonia, 443 in Latvia, 516 in Lithuania, 350 in Poland, 157 in Slovakia and 84 in Belarus.
In H1 2011, employee wages and salaries including social security taxes in the Group amounted to 15.1 million euros (H1 2010: 14.7 million euros). In H1 2011, the remuneration and benefits of the Group’s Supervisory and Management Board including social security taxes totalled 0.18 million euros (H1 2010: 0.16 million euros).
Consolidated statement of financial position (in thousands of euros)
| 30.06.2011 | 31.12.2010 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 40,958 | 28,960 |
| Financial investments | 3,796 | 3,937 |
| Receivables and prepayments | 4,121 | 4,959 |
| Prepaid income tax | 671 | 734 |
| Inventories | 1,019 | 1,416 |
| Non-current assets held for sale | 794 | 1,105 |
| Total current assets | 51,359 | 41,111 |
| Non-current assets | ||
| Deferred tax assets | 1,065 | 1,098 |
| Financial investments | 930 | 927 |
| Other long-term receivables | 708 | 949 |
| Investment property | 1,414 | 1,414 |
| Property, plant and equipment | 24,019 | 33,135 |
| Intangible assets | 28,697 | 29,062 |
| Total non-current assets | 56,833 | 66,585 |
| TOTAL ASSETS | 108,192 | 107,696 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 3,109 | 3,109 |
| Trade and other payables | 24,938 | 10,782 |
| Income tax payable | 827 | 833 |
| Provisions | 855 | 1,694 |
| Total current liabilities | 29,729 | 16,418 |
| Non-current liabilities | ||
| Deferred tax liability | 189 | 313 |
| Borrowings | 4,676 | 6,231 |
| Total non-current liabilities | 4,865 | 6,544 |
| TOTAL LIABILITIES | 34,594 | 22,962 |
| EQUITY | ||
| Share capital | 81,718 | 96,717 |
| Share premium | 14,535 | 14,535 |
| Statutory reserve capital | 2,470 | 2,413 |
| Translation reserves | -165 | 740 |
| Accumulated losses | -29,333 | -33,703 |
| Total equity attributable to equity holders of the parent | 69,225 | 80,702 |
| Non-controlling interest | 4,373 | 4,032 |
| TOTAL EQUITY | 73,598 | 84,734 |
| TOTAL LIABILITIES AND EQUITY | 108,192 | 107,696 |
Consolidated statement of comprehensive income (in thousands of euros)
| Q2 2011 | Q2 2010 | 6m 2011 | 6m 2010 | |
| Continuing operations | ||||
| Income from gaming transactions | 26,701 | 24,519 | 53,050 | 48,026 |
| Revenue | 2,030 | 1,722 | 3,831 | 3,216 |
| Other income | 1,990 | 171 | 4,011 | 308 |
| Total revenue and income | 30,721 | 26,412 | 60,892 | 51,550 |
| Cost of materials, goods and services | -671 | -551 | -1,306 | -1,096 |
| Other operating expenses | -14,088 | -13,440 | -28,267 | -26,688 |
| Staff costs | -7,217 | -7,092 | -14,373 | -14,066 |
| Depreciation, amortisation and impairment | -3,605 | -4,720 | -7,791 | -8,781 |
| Other expenses | -660 | -31 | -986 | -30 |
| Total operating expenses | -26,241 | -25,834 | -52,723 | -50,661 |
| Operating profit | 4,480 | 578 | 8,169 | 889 |
| Interest income | 78 | 68 | 153 | 131 |
| Interest expense | -117 | -169 | -244 | -403 |
| Foreign exchange gains (losses) | 98 | 5 | 114 | -22 |
| Other finance income and costs | -3 | -22 | -5 | -24 |
| Total finance income and costs | 56 | -118 | 18 | -318 |
| Profit from operating activities | 4,536 | 460 | 8,187 | 571 |
| Income tax expense | -604 | -330 | -957 | -287 |
| Net profit for the period from continuing operations | 3,932 | 130 | 7,230 | 284 |
| Net profit (loss) for the period from discontinued operations | 634 | -1,255 | -2,462 | -1,509 |
| Net profit (loss) for the period | 4,566 | -1,125 | 4,768 | -1,225 |
| Attributable to equity holders of the parent company | 4,245 | -760 | 4,427 | -1,104 |
| Attributable to non-controlling interest | 321 | -365 | 341 | -121 |
| Other comprehensive income | ||||
| Currency translation differences | -679 | -1,487 | -905 | -19 |
| Total comprehensive profit (loss) for the period | 3,887 | -2,612 | 3,863 | -1,244 |
| Attributable to equity holders of the parent company | 3,566 | -2,247 | 3,522 | -1,123 |
| Attributable to non-controlling interest | 321 | -365 | 341 | -121 |
| Basic earnings (loss) per share* | 2.8 | -0.5 | 2.9 | -0.7 |
| From continuing operations | 2.4 | 0.3 | 4.5 | 0.3 |
| From discontinuing operations | 0.4 | -0.8 | -1.6 | -1.0 |
| Diluted earnings (loss) per share* | 2.8 | -0.5 | 2.9 | -0.7 |
| From continuing operations | 2.4 | 0.3 | 4.5 | 0.3 |
| From discontinuing operations | 0.4 | -0.8 | -1.6 | -1.0 |
* euro cents
For further information, please contact:
Madis Jääger
Member of the Management Board, CFO
Olympic Entertainment Group AS
Tel + 372 667 1250
E-mail madis.jaager@oc.eu
http://www.olympic-casino.com
