Second Quarter Casino Results Looking Good in Canada

Company performances may sometimes seem a little dry, even for those interested in keeping an eye on their investments, but the performance barometer of an industry as a whole may be indicative of something larger than the sum of its parts.

Recent financial reporting form companies operating Casinos in Canada have started to show an upward trend which is piquing interest from investors. But how reliable are positive reports from a single quarter?

Greater Canadian Gaming (GCG) had been stuck in a bit of a rut for the latter part of 2017 and early 2018, a trend that seems to have been bucked by the latest data. Boasting Quarter 2 revenues of $305.2m, GCG can bask in the comfort of a 90 per cent improvement on the same period last year.

A boost of investment in expansion and diversification, with particular focus on Ontario, have finally started to see returns spanning the full quarter. This resulted in $64m return in net earnings, representing a 134 per cent improvement on last year’s figures. With some areas of the business, such as their West GTA Gaming Bundle, only in operation for 2 months, Q3 is already expected to continue this upward trend.

Rises in Income

Meanwhile Century Casinos has also seen some welcome improvement this year, with a 6 per cent increase in their net operating income for Q2 equating to $39.2m. The company has spent a significant amount of investment expanding their operations in the UK, Vietnam and Poland, which has perhaps hit their operational returns more than expected. CC reported a 73 per cent drop in operational earnings.

However, it has been the Canadian side of the business that has shown the strongest increase in performance with net operating revenue up by 7 per cent. The Company’s joint CEOs, Erwin Haitzmann and Peter Hoetzinger, underlined that the expansion costs were non-recurring implying that they fully expect to see a similar improvement to GCG once all developments are fully operational.

Galaxy Gaming has also joined the ranks of economic improvement with revenue increasing an impressive 24 per cent, or $4.5m, for its second quarter report.

Again, 2017 and 2018’s Q1 saw a significant outlay on operational expenses and quite positively, extinguishment of debt, which places Galaxy in a favourable position for Q3. As with GCG and CC, focus appears to have been on expansion and consolidating their existing position.

While Galaxy may be on the more modest end of the scale in terms of revenue and improvement, the figures returned by all three companies this quarter are indicative of a positive gradient on Canadian based Casino performance.

This is further supported by the fact that each company has undergone a period of investment that is only now beginning to come to fruition. With the potential for greater freedoms in how Casinos in Canada may operate, especially in terms of sports betting and online casinos, the question that now remains is how long the emerging period of steady growth should continue before reinvestment and further expansion efforts might begin again.

The next six months are clearly going to be an interesting time in Canada with the Casino industry returning to a state of significant prosperity that may offer many more opportunities for those ready to seize them.