Canada’s Amaya Gaming Group has reported a 360 per cent increase in revenues to CAD$18.3m for the third quarter of 2012, with full year revenues expected to be significantly boosted by the company’s recently completed Cadillac Jack and Ongame acquisitions.
Amaya said that third quarter revenues were boosted by the inclusion of software licensing and hosted casino revenues from Chartwell and CryptoLogic, as well as an increase in sales of its proprietary Mosino gaming stations.
“We were very pleased with the organic growth of our revenues in the third quarter over the second quarter, which was primarily due to the growth of the licensee bases in Europe of our subsidiaries CryptoLogic and Chartwell,” said David Baazov, president and CEO of Amaya.
Total expenses rose 177 per cent to $16.2m, with selling and marketing expenses increasing 106 per cent to $2.7m. General and administrative expenses grew by 173 per cent to $11.8m, driven by a growing employee base due to the Chartwell and CryptoLogic acquisitions and fully staffed operations in Moldova, Armenia, and the Dominican Republic. Consulting fees, amortization costs, and communications expense in connection with generating CryptoLogic's hosted casino revenue also contributed to the increase.
Amaya recorded an adjusted EBITDA of $5.9m for the third quarter, compared to an EBITDA loss of £0.9m a year ago, although this excludes $0.4m of acquisition-related costs and $0.1m of costs to terminate certain employment agreements. Overall, the company generated net earnings of $0.9m for the quarter, compared to a net loss of $1.8m a year ago.
Q3 and Jan-Sep 2012 Results
Canadian Dollars (CAD$) Q3 2011 Q3 2012 Jan-Sep 2011 Jan-Sep 2012
Revenues 4.0m 18.3m 8.9m 39.2m
Cost of Products 0.2m 0.05m 0.4m 0.8m
Gross Profit 3.8m 18.3m 8.5m 38.5m
Total Expenses 5.9m 16.2m 14.2m 45.9m
Net Earnings/(Loss) (1.8m) 0.9m (4.7m) (6.4m)
Basic EPS (0.04) 0.01 (0.11) (0.11)
For the nine month period, total revenues soared 342 per cent to $39.2m. On a regional basis, revenue growth was concentrated in the Caribbean and Europe during the period.
The Caribbean now accounts for 30 per cent of total revenues following an increase in the sale of the company’s Mosino gaming stations, while Europe accounts for 66 per cent as the customer base of Chartwell and CryptoLogic are predominantly European. Africa generated just 3 per cent as Amaya shifted away to more profitable markets in North America, Europe and the Caribbean.
A significant rise in total expenses however, up 223 per cent year-on-year to $45.9m, meant that the company widened its net loss to $6.4m for the nine month period.
Following the closure of the Cadillac Jack and Ongame acquisitions earlier this month, Amaya said that it expects fourth quarter revenues to be in the range of $36m to $40m, with adjusted EBITDA of between $13.5m and $15m.
“We're also extremely excited about our recent acquisitions of Cadillac Jack and Ongame,” continued Baazov. “Cadillac Jack provides Amaya with an important presence in the United States and the ability to offer physical, virtual, and mobile gaming solutions to our customer base, which addresses a growing trend toward convergence in our industry.
“Additionally, we expect to leverage Amaya's existing customer base in Europe as well as our sales and support staff to place Cadillac Jack's top quality gaming machines in that region.
“Our acquisition of Ongame provides us with a global online poker network reaching 20 million customers that includes 25 of the e-gaming industry's strongest brands. Having a top quality poker engine also positions us to participate in the U.S market as the regulation of online poker evolves. We expect to capitalize on revenue and cost synergies from both acquisitions early in the New Year.”
As at September 30th the company held cash and cash equivalents of $99.9m compared to $5.8m a year ago.
Shares in Amaya Gaming Group Inc (Co. Data) (TSX:AYA) will commence trading at $3.87 per share in Toronto later today.