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FYE 2009 RESULTS Safe Harbor Statement These presentations contain - - PowerPoint PPT Presentation

Sep 21, 2022 49 likes •391 views

FYE 2009 RESULTS Safe Harbor Statement These presentations contain forward-looking statements (including, without limitation, statements regarding the enhancement of shareholder value, and information and future guidance on our goals,

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FYE 2009 RESULTS

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These presentations contain forward-looking statements (including, without limitation, statements regarding the enhancement of shareholder value, and information and future guidance on our goals, priorities, orders, revenues, demand, growth opportunities, customer service and innovation plans, new product introductions, financial condition, earnings, liquidity, capital structure, operating performance, cost structure, cyclicality, the continued strengths and expected growth of the markets we sell into, operations, operating earnings, balance sheet models and our ability to be free cash flow positive under any normal economic environment) that involve risks and uncertainties that could cause results of Dreamgate to differ materially from management's current expectations. Factors that could cause demand to be different from Dreamgate’s expectations include customer acceptance of Dreamgate and competitors’ products; changes in customer order patterns, including order cancellations; changes in the level of inventory at customers; and changes in business and economic conditions and the timing of award exercises by employees. Dreamgate results could be impacted by unexpected economic, social, political and physical/infrastructure conditions in the countries in which Dreamgate, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates.

Safe Harbor Statement

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Contents

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Highlights Financial Overview Teh Mun Hui, FD Corporate Development Teh Mun Hui, FD Business Segment Update Steven Lim, COO Outlook, Target & Strategies Steven Lim, COO Q&A

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SLIDE 4

Highlights

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HIGHLIGHTS

Financial  Prudent measure of providing RM25 mil for impairment loss for machines yet to be in operations, affected pre-tax loss to RM60 mil  Net cash from operating activities remains healthy  SSM - Exceeded 10% of internal target machine sales Business  TSM - Focus for 2009 on mobilization plan.

  • Penetrated the concession market in Macau for first time,

partner the SJM Group, managing 6 slots operations for the SJM Group of casinos.  SSM

  • CRA, Singapore approved gaming equipment supplier

 L&E

  • Chateau de Bavet Hotel & Casino on 1st August 2009

 R&D

  • Successfully launched 4 progressive jackpot linked games with

more than 8 based games under RGBGames Corporate  279 mil shares (with total gross proceeds of RM46.2 mil) were placed out to raise funds primarily for capex purpose

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Financial Review

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Q-o-Q Revenue Increases As More Machines Sold in 4Q09, High Impairment Cost Factored In 2009

4Q09 RM mil 3Q09 RM mil Q-o-Q % 2009 RM mil 2008 RM mil Y-o-Y % Revenue 65.39 34.81 87.85 170.20 227.81 (25.29) Operating (Loss) / Profit (31.12) (5.18) 500.77 (51.77) 6.61 (883.21) (Loss) / Profit Before Tax (33.67) (6.69) 403.29 (60.51) (3.29) 1,739.21 (Loss) / Profit Attributable to Equity Holders (32.72) (5. 35) 511.59 (57.85) (2.87) 1,915.68 Net (Loss)/Earnings Per Share attributable to equity holders (sen)

  • Basic
  • Diluted

(3.22) N/A (0.57) (0.57) 464.91 N/A (6.26) N/A (0.33) (0.33) 1,796.97 N/A NTA Per Share (sen) 14 17 (17.65) 14 20 (30.00)

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PERFORMANCE OF 2009

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KEY RATIOS

3 months ended 12 months ended 31.12.2009 31.12.2008 31.12.2009 31.12.2008 GP margin (%) 15 28 16 35 Current Ratio (times) 0.54 0.81 0.54 0.81 Quick Ratio (Excluding inventory) (times) 0.48 0.75 0.48 0.75 Gearing Ratio Borrowings

  • Gross
  • Net

(times) (times) 1.00 0.86 0.83 0.66 1.00 0.86 0.83 0.66

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Ratios Reflect The Effects of the Forced Closure

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REVENUE BY BUSINESS SEGMENTS

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20 40 60 80 100 120 140 SSM TSM L&E Others

2009 - RM170 mil 2008 - RM228 mil

52% 35% 40% 57% 2% 5% 6% 3%

RM mil

Notes: L&E : Consist of revenue from companies involved in gaming and leisure activities Others : Consist

  • f

revenue from manufacturing activities, research & development activities and inter-segment transaction

SSM increased revenue with opening of new casinos, main contributor for 2009

SSM 11% Due to sales to casinos in Singapore and Philippines TSM 48%

  • Closure of slot clubs
  • New concession areas yet to

yield optimum results L&E 12%

  • Solely from Chateau, started
  • perations only in Aug 09
  • High promotional cost,

training cost, junket commission

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MAJOR COST COMPONENTS

Effective Internal Control Measures

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NET CASH FROM OPERATING ACTIVITIES

37.42 48.1 67.2 89.2 105 2005 2006 2007 2008 2009 Net Operating Cashflow (RM mil)

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Net Cash from Operating Activities Remains Healthy Despite Challenging Year

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IMPAIRMENT ON MACHINES

Mobilization Plan (as at 31 December 2009)

  • No. of machines not in operations

1,470 units Impairment loss for 2009 RM25.66 mil NBV before impairment RM72.75 mil NBV after impairment RM47.75 mil Best Case Scenario Worst Case Scenario Machines to placed out - Timeline End 1H2010 All not placed out at end of 2010 Provision of impairment loss Nil At maximum RM25 mil (as per 2009)

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Affected Machines Expected to be Operational By 1H2010

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CAPEX AND SOURCE OF FUNDING

78 62 122 99 136 36

20 40 60 80 100 120 140 160 2005 2006 2007 2008 2009 2010

Capex Incurred For Past 5 Years (RM mil)

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Capex in 2010 Expected to be Substantially Lower

Note : Capex refers to purchase of property, machines and equipment

2009 : Capex increase as certain new concession venues especially in Philippines and Macau require new machines to be placed. 2010 : Focus on improving yield, expect to place out 2,000 machines (out

  • f

which 1,470 expected from mobilization plan). Pre-2009 2009 2010 Source of funding

  • Internally

generated funds

  • Banking

facilities

  • Internally

generated funds

  • Banking

facilities

  • Private

placements – issuance

  • f 169.5 mil

shares

  • Internally

generated funds

  • Banking

facilities

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Corporate Development

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CORPORATE DEVELOPMENTS IN 2009

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Proposal Announcement Date Tranches (‘000 shares) Issue Price (sen) Listing date

  • f shares

Private Placement 30/09/08 1st

  • 72,160

15.7 20/07/09 2nd

  • 15,000

16.9 13/08/09 Private Placement 01/09/09 1st

  • 82,300

18 30/10/09 Sub-Total 169,460

  • In 2010

2nd

  • 38,540

16 20/01/10 3rd

  • 62,800

16 25/01/10 4th

  • 8,200

16 25/01/10 Sub-Total 109,540 Grand Total 279,000

1st Public Fund Raising Exercise Since Listing

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SUMMARY OF PLACEES

63% 37%

1st Placement

Institutions Individuals

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11% 89%

2nd Placement

Able to complete the placements despite challenging conditions

87.16 mil shares 191.841 mil shares

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Business Segment Review

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SSM – MACHINES SALES IN 2009

Sales of machines exceeded target by 10%

Country Target machines to be sold FY2009 (units) Actual machines sold FY2009 (units) Target vs. Actual (%) Machines sold in 2008 (units) 2009 vs. 2008 (%) Malaysia 100 70 (30) 87 (20) Philippines 600 736 23 550 34 Vietnam 200 38 (81) 120 (68) Singapore 50 220 340 22 900 Macau 150 *40 73 217 (82) Others

  • 109

N/A 25 336 Total 1,100 1,213 10 1,145 6%

Note : * Instead of outright sales, operators of casinos in Macau considered concession programmes to reduce their investment cost. Hence, lower machine sales were recorded.

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TSM – CONCESSION VENUES

Summary of Concession Venues As at December 2009 Country

  • No. of Venues
  • No. of Machines

As at Dec 2009 At at Dec 2008 As at Dec 2009 Outcome (%) Philippines 11 17 55 2,016 Macau

  • 6
  • 888

Cambodia* 37 11 (70) 2,038 Vietnam 3 3

  • 154

Laos 1 #2 100 59 Others

  • 1
  • 193

52 40 (23) 5,348 Notes: * Refers to casinos in Bavet and Poipet # Includes a casino where the Group manages 110 machines at the venue

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Able to penetrate into new concession market/venues

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TSM – MOBILIZATION PLAN

1,470 920 120 80 500 130 204

Yet to be in operations Cambodia Laos Macau Philippines Singapore (Cruise ship) Spare Parts

Total machines

3,424

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Affected Machines to be Fully Operational By 1H2010

  • 57% of affected machines
  • In operations;
  • Sold; or
  • Source of spare parts
  • 43% expected to be in operations

by end 1H2010

  • Concession venues have been

identified : 500 for Laos, remaining to Philippines

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L&E – CHATEAU DE BAVET : AN UPDATE

15 15 20 30 30

400 380 250 630 800

100 200 300 400 500 600 700 800 900 AUG '09 SEPT '09 OCT '09 NOV '09 DEC'09 SLOT MACHINES TABLE GAMES

Monthly Gross Gaming Revenue Per Unit (USD) 21

Started Operations : 1 August 2009

Chateau

  • Gestation period around 6 to 9 months
  • Facilities are expected to be fully completed by

2010

  • As at end Dec 2009:
  • Slots : 109 machines
  • Table games : 38
  • By 1H2010, another additional 30 tables for

junket operations Performance - Daily Gross Revenue Our target (per day):

  • Table games : USD600/table
  • Slots : USD50/machine

Note: As at Dec 2009, yield for table games exceeded our

  • target. Slots falls a little short. We are continuously

re-looking into our strategies to improve the yield to attract players to the slot and also table games.

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Outlook, Target and Strategies

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OUTLOOK - ASIAN GAMING INDUSTRY

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Asian Gaming Industry Relatively still promising No mega projects Replacement Market Operators Observing Conservative Approach OPPORTUNITIES SSM TSM

CRA Singapore in Feb 2010 approved DSPL – 100% subsidiary of Dreamgate, as a supplier of gaming equipment of casinos in Singapore

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SSM – TARGET MACHINES SALES IN 2010

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8% 50% 10% 16% 8% 7% Malaysia Philippines Vietnam Singapore Macau Others 2010 – 1,250 machines

Country Target

  • No. of

machines to be sold FY2010 Actual

  • No. of

machines sold FY2009 Malaysia 100 70 Philippines 630 736 Vietnam 130 38 Singapore 200 220 Macau 100 40 Others 90 109 1,250 1,213

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TSM – TARGET CONCESSION VENUES

Country

  • No. of Venues

Total concession in 2010 Total machines in 2010 As at Dec 2009 New Concession In 2010 Venue Timeline

  • No. of

machines Philippines 17 1 at Cebu 2Q10 170 23 3,316 1 at Albay 2Q10 110 Manila : 1 1 2 2Q10 3Q10 4Q10 320 210 340 Expansion on existing projects : 2 at Manila 2Q10 150 Macau 6

  • 6

888 Cambodia 11

  • 11

2,038 Vietnam 3 Expansion on existing projects : 1 60 4 214 Laos 2 1 at Golden Triangle 1 at Tranch Province 500 100 4 659 Others 1

  • 1

193 Total 40 8 1,960 48 7,308

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2009 Mobilization Plan Source suitable venues Removal of machines from club Prudent Cost Management

STRATEGIES – FOCUS ON IMPROVING YIELD

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2010

Strengthening Core Businesses Business Consolidation Phase Continuous R&D Efforts for Games Development Prudent Cost Management

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BUSINESS CONSOLIDATION PHASE

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  • Continue offering existing flexible biz model
  • Continue introducing new exciting Asian-themed games especially

in Malaysia and Philippines

  • Focus on newly signed sports icon and new themed link jackpot like

Wang Wang Wang

  • Offer longer payments terms (with interest built-in)
  • Focus on existing customers of new games via trade-in to provide

more attractive terms

  • Human development - training

SSM

  • Focus on completion of mobilization plan by 1H10
  • Internal re-organization and strengthening management team
  • Continue to look out for attraction concession venues which would

reduce capital outlay

  • Focus on increasing yield per machine
  • Human development - training

TSM

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BUSINESS CONSOLIDATION PHASE

  • Focus on the yield management of slot machines & table

games through promotions to achieve target income

  • Increase junket promotion in Bavet

L&E

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For 2010

  • Continue

to focus introducing Asian- themed games and new game platform for 2010 onwards

  • Expect

to launch 3 new progressive jackpot links and 7 standalone games.

  • 1st progressive jackpot link game - ‘WANG

WANG WANG’ will be introduced at end March at the Asia Gaming Expo in Manila

  • R&D cost expected to be approx. RM3 mil

CONTINUOUS R&D EFFORTS

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Some of the developments for 2010

Review of 2009

  • More than 8 based-games developed and

2 of our in-house developed games were adjudged CHAMPION and 2nd RUNNER- UP at the AGEM Expo in Manila

  • Amount spent for R&D approx. RM2.9 mil
  • Manufactured about 400 machines at our

Prai factory

Winners at AGEM EXPO, Manila 2009

Shanghai Night CHAMPION The Legend of SPARTA 2ND RUNNER-UP

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PRUDENT COST MANAGEMENT

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Effective Cost Management Streamlining

  • perational

structure Freeze and reduction on headcount Further Operational cost reduction

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Appendices

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Summary of Concession Venues Opened in 2009

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Total Concession Venues Opened in 2009 : 16 Total Machines Placed at Venues in 2009 : 2,287

1 Golden Dragon Casino 122 2 Jimei Casino 46 3 Grandview Casino 117 4 Lan Kwai Fong 104 5 Casa Real 116 6 L'Arc 383 Total Macau : 6 888 7 Oriental Pavillion Guiguinto (Bulacan) 136 8 Oriental Paradise Casino (Subic) 181 9 Oriental Paradise Suite & Casino (Pasay) 93 10 Club Majestic (Networld Hotel) 134 11 Manila Grand Oriental Casino 98 12 PAGCOR Club, Binan Laguna 118 Total Philippines : 6 760 13 Chateau De Bavet Casino (Bavet) 109 14 Poipet Casino Resort (Poipet) 277 Total Cambodia : 2 386 15 ST Club 59 Total Laos : 1 59 16 Ben's Entertainment City (Cruise) 193 Total (Cruise) : 1 193 Singapore NO CONCESSION VENUES UNITS OF M/C REGION Macau Philippines Cambodia Laos

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Summary of Concession Venues Closed in 2009

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Total Concession Venues Closed due to forced closures at Cambodia : 21 Total Concession Venues Closed due to underperformed : 2 Total Concession Venues Closed due to relocation : 2

  • No. of Venues

Closed in 2009 Phnom Penh 13 Due to forced closures Siem Reap 8 Due to forced closures Bavet 1 Underperformed 1 Underperformed Poipet 1 Relocation Total 25 Location Remarks Philippines Cambodia 1 Relocation

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Q&A Thank You