AMAYA GAMING RELEASES Q2 RESULTS
31st August, 2011 at 03:27:29
Revenues up, but a net loss of Cdn$1.11 million recorded in second quarter
Amaya Gaming, the Montreal-based onloine gambling group that acquired Chartwell Technology earlier this year (see previous report) has released its second quarter 2011 report.
Financial results for the quarter, which ended June 30 2011, showed revenues of Cdn$3.77 million for the second quarter of 2011, an increase of Cdn$2.76 million or 275% compared to Cdn$1.01 million of revenues in the second quarter of 2010.
For the six-month period ending June 30, 2011, revenues were Cdn$4.91 million, an increase of Cdn$2.42 million or 97% compared to Cdn$2.49 million of revenues in the same period of 2010.
"The increase reflects the Corporation's efforts to gain traction of its solutions aimed at the hospitality and government sectors and SMS sales in the Republic of Kenya," Management notes.
Amaya's gross profit was 94% in the second quarter of 2011, compared to 82% in the second quarter of 2010.
For the year-to-date period, gross profit was 95% for the first six months of 2011, compared to 81% in the first half of 2010. Increases in gross profit for both the three month and six month periods were primarily driven by software license sales and SMS sales in the Republic of Kenya.
Sales and marketing expenses came in at Cdn$1.77 million for the second quarter of 2011, compared to Cdn$170 000 a year earlier. On a year-to-date basis, sales and marketing expenses were Cdn$3.69 million in 2011 compared to Cdn$380 000 in 2010.
General and administrative expenses were Cdn$2.15 million for the second quarter of 2011, compared to $790 000 in Q2 2010. For the six-month period, general and administrative expenses were Cdn$3.56 million in 2011 compared to Cdn$1.25 million in 2010. The year-over-year increases were mainly attributable to advertising, marketing, and prize pool funding for the SMS Lottery operation in the Republic of Kenya as well as a growing employee base and a fully staffed operation in that country, Management reported.
Amaya recorded a net loss of Cdn$1.11 million in the second quarter of 2011, compared to net earnings of Cdn$58,751 in the second quarter of 2010. On a year-to-date basis, a net loss of Cdn$2.93 million in 2011 compares to net earnings of Cdn$510 000 the previous year.
"While revenues have grown significantly in 2011, the increases have been offset by substantial increases in operating expenses incurred as the Corporation has invested in its continued growth," explained Management.
Operational highlights for the period included:
* Amaya's SMS-based lottery solution currently in operation in Kenya has surpassed 200,000 SMS lotto tickets purchased in a day, far exceeding initial targets.
* The company announced an agreement with Société des Casinos du Québec to provide virtual horse racing systems for use at several properties including the Montreal and Lac Leamy Casinos, along with a lottery and online gaming contract with Montenegro, its first such contract with a European country.
* On June 15, the Corporation announced the closing of a bought deal private placement of 3,300,000 common shares at a price of $3.10 per share, for aggregate gross proceeds of $10,230,000.
* On July 14, Amaya completed its previously announced acquisition of Chartwell Technology Inc. for consideration totalling $22.7 million. The combination of the two business is expected to result in synergies and new growth opportunities for both.
"Our second quarter results illustrate the impact our business can experience from launching even a single gaming solution. The majority of our revenue growth was attributable to the operation of the SMS Lottery in the Republic of Kenya for its first full quarter," said David Baazov, president and chief executive officer of Amaya Gaming Group.
"Looking forward, we are in the process of implementing several of the additional contract wins that we have announced in recent months, and we expect these initiatives to lead to further growth in our recurring revenue base in the coming periods. The addition of the Chartwell Technology business will also help us accelerate our growth beginning in our fiscal 2011 third quarter."
Related News Tags: Chartwell, Lotteries