Entertainment Gaming Asia, a gaming company focused on markets in Pan-Asia, posted a widened net loss of $2 million for the first quarter of 2017, a 81.8 percent increase compared to the first quarter of 2016.
The company said the increase in net loss was primarily due to lower gaming operations revenue and higher operating costs and expenses mainly related to the social gaming operations.
The company reported first quarter revenue of $416,000, down 31 percent year-on-year compared to $604,000 in the first quarter of 2016.
The year-on-year decline in consolidated revenue was primarily due to a reduced operating base of electronic gaming machines (EGMs) for the Philippines gaming operations as a result of the expiration of the EGM leasing agreement with Leisure World VIP Slot Club on June 30, 2016 and lower average daily net win per unit, said the company.
First quarter consolidated revenue comprised of around $379,000 from the Philippines gaming operations and around $37,000 from the commercial testing of the social gaming application, City of Games, which commenced in August 2016.
Total expenses rose in the first quarter to $2 million, compared to $1.2 million in the prior year period.
“The increase [in expenses] primarily related to the ramping up of the social gaming operations, which comprised $1.3 million in combined SG&A and R&D expenses for the first quarter of 2017 compared to $399,000 in the first quarter of 2016.”
The company in its filing also announced that on May 3, 2017, it had entered into a MOU to sell its remaining operating assets in the Philippines for cash consideration of approximately $1.9 million. The sale is expected to close in the 17Q2.