Cirsa sees income and profit drop amid Covid-19 closures in Q1

27 May 2020

Spanish gambling operator Cirsa has reported a year-on-year drop in operating income and operating profit for the first quarter, primarily due to the closure of land-based gaming facilities across a number of markets as a result of the novel coronavirus (Covid-19) pandemic.

Revenue the three months to 31 March amounted to €355.7m (£318.8m/$391.5m), down 6.1% from the corresponding period last year.

Though Cirsa did not go into further detail on its financial performance for the period, it did state that operating profit for the quarter amounted to €88.8m, down 14.1% from the previous year.

Cirsa said that it enjoyed a strong start to the quarter, with the business performing well in January and February. However, the total closure of its gaming machine business in bars and gambling venues in March halted any progress.

Covid-19 enforced closures took place across a number of markets, beginning in Italy on 8 March, through to the temporary shutdown of activities in Mexico on 25 March. Venues are yet to reopen, but Cirsa said its online business Sportium, which remained operational throughout the land-based shut-downs, partially mitigated this disruption. 

Despite customers having their betting options limited due to the cancellation and postponement of many sports events worldwide, Cirsa said Sportium had performed in line with expectations in Q1. Cirsa acquired GVC Holdings’ stake in its Sportium joint venture in October last year.

Looking at land-based activities, Cirsa said its casinos operations performed well in the early part of the quarter, noting an improvement in results, but adding that momentum was checked by the shut-down.

Cirsa’s slots arm in Spain also reported growth in January and February prior to the closure of gambling venues in the country, while its Spanish bingo business posted solid results in the early part of the quarter.

Focusing on Italy, Cirsa said its business in the country performed well in January and February, while its Mexican arm was boosted by the incorporation of seven new gambling rooms early on in Q1.

Cirsa said that its Unidesa B2B division also saw some level of growth during the quarter, whereas its salons segment continued the trend of the previous quarter, consolidating the incorporation of the Giga Game business and renovation of its products and venues.

“Given the exceptional situation at the social and economic level, management is focused on safeguarding the sustainability of the company, managing decisions that protect its short, medium and long-term future, including measures related to the liquidity and solvency of the company and others aimed at a significant reduction in operating costs, in order to minimise the impact derived from the total closure of the business to date,” Cirsa said.

“The other focus of attention is the implementation of comprehensive health protection measures for all employees and clients at the time of reopening, thus transmitting the necessary security for a return to the activity that the company expects to be produced from gradually and at the rate in which the different competent authorities allow it.”