Canadian online gambling group profits down

Revenues at Canadian online gambling group Amaya Gaming soared 156 percent in Q2-2013, but the company still saw net losses mount 320 percent y-o-y to come in at $11.4 million when it announced its latest results Friday.

Events in the quarter included:

* Approval to graduate from the TSX Venture Exchange to the Toronto Stock Exchange

* Private placing that raised $40 million for future growth

* Deal between Cadillac Jack and the California Nations Indian Gaming Association for the provision of wide area progressive gaming products to CNIGA’s tribal members, and further Cadillac Jack land deals in Mexico.

* Acquisition of gaming manufacturer Diamond Game Enterprises for $25 million.

* Provision of the Ongame Poker platform and Live Dealer product to mybet.

* Deal with Cogetech for the provision of Ongame internet poker facilities to Izipoker.it.

* MOU with Aristocrat Technologies through which Aristocrat will offer Ongame poker platform to US customers.

Financial highlights included:

* Revenue at $37.25 million, up 156 percent compared to Q2-2012’s $14.54 million.

* H1-2013 revenue $75.31 million compared to $20.92 million for H1-2012 – an increase of 260 percent.

* Gross profit (revenue minus the cost of products) represented 98 percent of total revenues over Q2 and 97 percent over the half-year.

* Total expenses of $44.45 million for the quarter – up 160 percent y-o-y. For H1-2013 expenses came in at $89.07 million – up 200 percent y-o-y

* Net loss of $11.44 million in the second quarter of 2013 versus $2.72 million in the same quarter of 2012, an increase of 320 percent. H1-2013 net loss was $18.88 million in the same period in 2012, an increase of 159 percent.

* Adjusted EBITDA was $10.17 million in the second quarter of 2013, or 27 percent of total revenue, compared to $2.09 million, or 14 percent of total revenue, in the second quarter of 2012, and $10.26 million, or 27 percent of total revenue, in the first quarter of 2013.

Chief executive officer, David Baazov, said:

“We’re quite pleased with the continued progress we made in the second quarter in our land-based, interactive, and lottery solutions.

“We have completed most of the integration of Ongame and Cadillac Jack, both of which we acquired in late 2012. This will result in a positive impact on our operating expenses going forward.

“Within our interactive solutions, during the second quarter we continued to prepare ourselves to participate in real money online gaming in the United States, including filing our application for a licence in New Jersey.

“Additionally, we are seeing progress from our partnership with SHFL Entertainment, which is the exclusive distributor of our online poker platform, Ongame Network, in the U.S.

“Finally, during the quarter we also announced our acquisition of Diamond Game. We anticipate the company’s lottery technology, on which we can integrate our extensive game library, will increase our lottery footprint in North America while being accretive to our adjusted EBITDA. We expect the acquisition to close in the fourth quarter of this year.”

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