Cirsa slips to loss despite revenue growth in Q1

Gambling operator Cirsa has reported a net loss of €5.6m (£5.0m/$6.3m) in the first quarter of 2019, despite its Spanish operations and Latin American casinos helping drive revenue up.

Operating revenue amounted to €443.0m, up from €417.2m in the same period last year, while net operating revenue, after rent increases on properties, climbed 8.5% from €349.3m to €379m.

Slots remain the primary source of income for Cirsa, with the division positing net operating revenue of €186.3m, up from €175.8m last year. Cirsa said that this was a result of improvements in terms of both operating and commercial efficiency and product management.

Casinos generated €128.6m in revenue, up from €117.4m in Q1 2018, with Cirsa citing the implementation of a strategic plan across all of its operating territories, including the opening of three new casinos in Panama and expanding 14 venues in a number of regions.

Elsewhere, bingo revenue increased from €55.1m to €60.2m as Cirsa felt the benefits of a project to remodel and expand its product offering in bingo halls in Andalusia. The operator also noted improvements to Dynamic Bingo in Madrid and new Binjocs machines in Catalonia.

Revenue for the Cirsa B2B division also climbed from €25.1m to €28.0m due to a higher demand for slot machines and refurbishment services in Spain.

However, Cirsa did note an increase in expenses across a number of areas of the business in the quarter. Gaming tax costs jumped from €127.0m to €140.5m, while personnel expenses rose from €57.3m to €61.0m.

Depreciation and amortisation costs were also up from €43.4m to €65.1m and consumptions increased to €17.9, but Cirsa was able to make savings on external supplies and services, which fell from €64.0m to €56.2m.

This meant that earnings before interest and tax slipped from €41.4m to €38.2m, while profit before income tax slumped from €22.9m to €4.9m. Income tax was lower at €6.2m, but profit after tax from continuing operations dipped to a loss of €1.3m.

Net loss for the quarter stood at €5.6m, compared to a profit of €19.5m last year, but earnings before interest, tax, depreciation and amortisation was up from €84.8m to €103.4m.

Cirsa operates as part of Blackstone Group having been acquired by the private equity fund in April of last year.