12th of June 2009 Author: Glo Wood
Hits group Q1 revenue forecast of $44.4 Million, but Internet casino and poker interests disappoint
The latest Q1 2009 results from Everest Poker's parent group Gigamedia in Taiwan will make interesting reading for the two major gambling groups with which it is currently in discussions regarding a sale of its online gambling interests.
Financial highlights included:
* Poker and casino software revenues of $31.7 million, in line with expectations.
* Active depositing poker players held steady quarter-over-quarter; new depositing players grew slightly during the period.
* Asian online games revenues of $12.7 million, up 33 percent quarter-over-quarter on strong organic growth, with FunTown and T2CN revenues up 27 percent and 43 percent, respectively, during the period.
Operational highlights and developments covered:
* Everest Poker sponsorship of the Spanish Poker Tour.
* Asian online games platform: FunTown begins open beta testing of new MMORPG Warhammer Online in Taiwan and Hong Kong.
* Asian online games platform T2CN begins beta testing of Luna Online, one of Asia's most successful MMO games; plans China launch this summer
The company posted overall first-quarter revenues of $44.4 million and net income of $4.8 million, but the results were nevertheless negatively impacted by global economic conditions and continued weakness of the Euro against the U.S. dollar.
CEO Arthur Wang revealed that Gigamedia is in final round discussions with two still undisclosed parties concerning a potential strategic partnership or sale involving its poker and casino software business, although he gave no further details.
And he revealed that the online gambling interests had endured a tough quarter.
"In the first quarter, our Everest software business faced greater than expected challenges from the macroeconomic downturn and the weakness of the Euro - slowing our business in Europe," Wang said. "We have responded with a set of cost reductions and efficiencies which will protect the financial strength of the business, as well as prepare for a return to growth as a leaner, tighter organization.
"The good news: we believe we have hit bottom in this cyclical downturn and that the second half will see renewed strength in Europe. And in Asia, we are looking at our best year ever, with strong top and bottom-line growth."
Gigamedia President and COO Thomas Hui added: "We remain confident in the strategic position of our poker and casino software business, and are excited about the new games we are launching in Asia this year," stated . "Our core businesses remain healthy and well positioned to deliver strong long-term growth."
The downturn in the group's fortunes has been marked, mainly due to the difficulties being experienced by the casino and poker operations. Net income declined 60 percent compared with Q1 2008 to $4.8 million as revenue slowed by 13 percent to $44 million. The online casino operations performed somewhat better than the online poker interests, with revenues up 18 percent to $10.2 million compared to the same period last year, thanks mainly to the benefits of cross-selling from the poker site.
Online poker revenues dropped 27 percent to $21.6 million compared with Q1 2008.
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