It happens in April and May every year. Many companies operating in the January-December fiscal year offer up their first quarter earnings statements. Others operating on a different fiscal basis, however, get their bearings as the new year gets underway.
Investors and customers alike are able to see how companies are performing in the new calendar year, complete with new goals in place and new plans implemented. One quarter cannot sufficiently predict how a company will do throughout the year. Nevertheless, it is an indication of the direction of that business as the new year gets underway.
Two recent reports cover the spectrum of gambling – land-based casinos and sports betting, Australian business and the broader Asian market.
Casino company Donaco operates predominantly in Asia but is listed in the Australian Securities Exchange. Its revenue details subsequently give some insight into the VIP casino market.
Online gaming company Paddy Power Betfair may not operate as substantively in the Australian gaming market as it once did. However, it does business in Australia via Sportsbet and credits strong growth in that market for its solid first quarter of the year.
Donaco International Explained
Founded in 1990, Donaco maintains its headquarters in New South Wales. It operates leisure and entertainment businesses in the Asia Pacific region, currently focused on Cambodia and Vietnam.
Donaco’s flagship business is the Aristo International Hotel in northern Vietnam at the Chinese border. Built in 2002, it recently expanded to offer 400 hotel rooms and more offerings as a resort. The largest business owned by Donaco, however, is the Star Vegas Resort & Club in Cambodia at the Thai border. The company acquired this property in 2015. The resort boasts of nearly 400 hotel rooms, but the casino is the primary attraction with more than 1,500 slot machines and 100 gaming tables.
First Quarter Earnings Up 7%
The first quarter revenue in 2019 for Donaco rose more than 7% year-on-year to $17.2 million. That’s compared to $16.86 million in 2018. First quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) dropped 1.9% from $7.7 million to $7.63 million.
For Star, net revenue increased to $13.74 million, and EBIDTA dropped to $6.19 million. And Aristo revenue dipped slightly from $4.6 million to $4.5 million, but EBITDA remained the same at $2.3 million.
Donaco attributed its success to higher group revenues and tighter management of corporate costs.
Paddy Power Betfair Explained
Primarily a bookmaking business, it was created by the merger of Paddy Power and Betfair in 2015/2016. The former was founded in 1988 in Ireland, and the latter started in 2000 in London.
The company operates numerous brands, such as Sportsbet, TVG, and FanDuel. On the retail side, PPB focuses on more than 600 betting shops in the UK and Ireland. That is in addition to Sportsbet in Australia and the TVG horseracing network in the US.
The four primary divisions of PPB are online, retail, Australia, and the United States.
First Quarter Earnings Up 17%
Paddy Power Betfair reported a 17% year-on-year increase for the first three months of 2019 with $624.6 million in revenue. Sports revenue was up 15% and gaming up 26%.
The US market saw the biggest percentage of growth at 47%, but Australia was another benefit with a 20% revenue rise. Sportsbet revenue rose to $125.7 million, driven by customer stakes. Even so, the revenue was below expectations because of adverse racing results. The overall result was positive, though, and was up by 9.2% over the first quarter of 2018.
PPB Chief Executive Peter Jackson said that underlying momentum remains good for Paddy Power. He also added that Betfair is making good progress on technology development to enhance its global customer propositions and accelerate international growth. “Q1 was a good quarter for the Group with revenues up 17%, notwithstanding customer friendly sports results in the UK,” he noted. “We remain on track to meet our full-year profit expectations.”