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s we have all seen, both in Latin America mainly and in the world in general, the gaming sector was one of the most affected by the pandemic.
Casinos, bingo, and gaming halls were closed during the toughest months and have since suffered due to the restrictions.
Due to its exposure to the Spanish and Italian markets, Cirsa has suffered from the effects of COVID-19 since then, although by 2022 the company expects to have recovered the EBITDA levels it had in 2019.
In a report sent to investors, the company explained that by the end of 2021 it will be ready “to recover the levels of 2019 and continue to meet the financial commitments acquired.”
In the same document, the company led by Joaquín Agut celebrated the positive performance achieved over the last few months: since March, EBITDA has improved month by month and is already generating positive cash flow. By mid-June, 83% of its operational capacity was already active and, thanks to vaccination, there is confidence in improving the percentage in the remainder of the year.
Between April and June, EBITDA ranged between 80 million and 82 million euros, pending the official calculation. This represents approximately 70% of the volumes that were handled in the same period of 2019. The development of the business already implies a “solid cash position”.
According to the aforementioned, the company is preparing to expand once again, after the severe cost reduction plan that led to a reduction in spending to 40% in months like March 2020.
An example of the austerity imposed was that any invoice exceeding 1,000 euros had to be approved by the company’s financial director.
But the Spanish firm did not only faced the coronavirus with a cost cut. During the spring of last year, the company tried to strengthen its balance sheet and signed credit lines for €200 million with the creditor banks. In June, it went one step further and requested three new credit lines for €55 million, €20 million, and €23 million, respectively. Now, the company will focus on cutting the current debt of between 2,385 and 2,395 million euros in May, given that the figure has increased by 5.7% since the outbreak of the pandemic.
Online gaming, a lifesaver in the midst of the storm
Although it still represents a small percentage of its business, Cirsa shows growth of over 200% in the online gaming vertical, and with the return to normalcy of sports competitions, the numbers are expected to further improve.
The boost occurs despite the hostility of the Spanish Government towards the gaming sector. The Minister of Consumer Affairs, Alberto Garzón, faced a fight against online gambling and bookmakers. As of this Tuesday, the advertising of these platforms can only be broadcast in the media and YouTube between one and five in the morning.
Advertisements for these services during sports broadcasts are banned and brands may not sponsor competitions or clubs.
The regulation was approved last October amid harsh criticism from the sector. Industry associations and employers warned that the new law would encourage illegal gambling and harm licensed operators.
Original article: https://www.yogonet.com/international//noticias/2021/08/31/59067-cirsa-will-offer-pre-pandemic-levels-this-year-despite-restrictions-and-hostility-to-gambling
