Management Reports • Nov 30, 2017
Management Reports
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3RD QUARTER 2017
| 07 | Governing Bodies |
|---|---|
| 09 | Management Report |
| 21 | Annex to the Management Report |
| 23 | Holders of Qualified Shareholdings |
| 24 | Consolidated Financial Statements |
| 29 | Notes to the Accounts |
INDEX
Chairman Pedro Canastra de Azevedo Maia
Deputy Chairman Tiago Antunes da Cunha Ferreira de Lemos
Secretary Marta Horta e Costa Leitão Pinto Barbosa
Chairman Rui José da Cunha
Pansy Catilina Chiu King Ho Jorge Armindo de Carvalho Teixeira Calvin Ka Wing Chann
Chairman Stanley Hung Sun Ho
Deputy Chairmen Mário Alberto Neves Assis Ferreira Patrick Wing Ming Huen
Pansy Catilina Chiu King Ho Ambrose Shu Fai So Man Hin Choi António José de Melo Vieira Coelho Vasco Esteves Fraga Jorge Armindo de Carvalho Teixeira Calvin Ka Wing Chann Miguel António Dias Urbano de Magalhães Queiroz
Chairman Manuel Maria Reis Boto
Deputy Chairmen Vitor Pratas Sevilhano Ribeiro Paulo Ferreira Alves
Alternate Lisete Sofia Pinto Cardoso
Secretary Carlos Alberto Francisco Farinha
Alternate Artur Alexandre Conde de Magalhães Mateus
Deloitte & Associados, S.R.O.C., S.A. - represented by Pedro Miguel Argente de Freitas e Matos Gomes
Estoril-Sol, S.A. was incorporated on 25 June 1958 and its company object is "the operation of the gambling concession, on an exclusive basis, in the Estoril permanent area, including other related trade and industries".
On 18 March 2002, ESTORIL-SOL, S.A. modified its legal status to "Holding Company, S.G.P.S.", Public Corporation, thereby no longer directly conducting any business activities, and such business is now to be conducted by various associated undertakings which have been incorporated for this purpose.
The Company held indirectly through subsidiaries interests in the tourism sector, in particular, in gaming activities at casinos. The Company owns the Game Concessions of Estoril (Casino do Estoril and Casino Lisboa) and Póvoa de Varzim. Since July 2016 the Company also began exploring the online gambling activity and sports betting through one of its subsidiaries.
During the first nine months of the year we monitor regularly and in detail the current management of the subsidiaries, giving particular attention to the evolution of gaming revenues and support to streamline and optimize processes.
At 30th September 2017, the share capital of ESTORIL-SOL, S.G.P.S., S.A. was 59.628.420 Euros, represented by 11.993.684 shares with a nominal unit value of 5 (five) Euros, of which 6.116.779 were registered shares and 5.876.905 bearer shares.
At the time this report was prepared, ESTORIL-SOL, S.G.P.S., S.A. held 62.565 treasury shares, with no trading taking place during the financial year. During the first nine months of 2017, the Company, did not sold or acquired own shares.
The Company's shares are listed on the Lisbon Stock Exchange since February 14, 1986 — î2.A.
In June 2017 the Company paid a dividend of € 0,335 per share related to the year 2016. The price and trading volume of Estoril-Sol, S.G.P.S., S.A. securities, on the dates of reporting to the market during the year 2017 were according table below — î2.B.
As at September 30th, 2017 the Company had two reference shareholders, which control 90,46% of the share capital, as infographics î2.C.
On September 30th, 2017, ESTORIL-SOL, S.G.P.S., S.A. had the following stakes in the following subsidiaries:
Incorporated on 26 July 2001, headquartered in Estoril, the social object of which is the operation of games of chance in areas where this is permitted by law and, in addition, may also operate in the tourism, hotel, restaurant and entertainment industries, as well as providing consultancy services in those areas of activity. This company operates the Estoril and Lisbon Casinos. Its share capital of EUR 34,000,000 is 100% held by ESTORIL-SOL, S.G.P.S., S.A.
With a Share Capital of EUR 500.000 is 50% held by ESTORIL-SOL (III) –TURISMO, ANIMAÇÃO E JOGO, S.A. The Company was founded in September 2015 in order to apply for an online gaming license. The license was issue during July 2016 and the Company immediately started exploring the online gambling activity.
î 2.A Estoril-Sol, S.G.P.S., S.A. shares price - Evolution
î 2.B Date for disclosing Estoril-Sol, S.G.P.S., S.A. information î 2.C Company Shareholders
(Estoril-Sol Security - Price in Euros)
| DISCLOSURE | DATE | QTD | PRICE | ||
|---|---|---|---|---|---|
| Annual results | 3,30 Open |
3,30 High |
|||
| for 2016 | 28/04/17 | 42 | 1,35 Close |
3,30 Low |
|
| Dislose Results 29/05/17 1st Quarter 2017 |
4,10 Open |
4,10 High |
|||
| 19 | 4,10 Close |
4,10 Low |
|||
| Dividends | 5,54 Open |
5,54 High |
|||
| payment | 21/06/17 | 210 | 5,54 Close |
5,54 Low |
|
| Dislose Results 1st Semester 2017 |
8,80 Open |
8,95 High |
|||
| 24/08/17 | 5349 | 8,95 Close |
8,80 Low |
During the course of 2017, in August, the company also obtained a license for online sports betting, activity that began on August 6th, 2017. Within the online gaming activities, which is carried out through Estoril Sol Digital, Online Gaming Products and Services, S.A., a subsidiary company of Estoril Sol (III) – Turismo, Animação e Jogo, S.A., a company owned by the issuer (Estoril-Sol, S.G.P.S., S.A.), signed with Vision Gaming Holding Limited, a company based in Malta, an association agreement, through which it holds a minority interest, corresponding to 49.9998% of the share capital of Estoril Sol Digital, keeping the Estoril Sol (III) S.A. most of the capital and votes in that company (Estoril-Sol Digital, Online Gaming Products and Services, S.A.).
Headquartered in Póvoa de Varzim, has the social object, in particular, of operating the gambling concession of Póvoa de Varzim. This company operates the Póvoa de Varzim Casino. It has a share capital of EUR 33.650.000, 100% held by ESTORIL SOL, S.G.P.S., S.A..
ESTORIL SOL (V) Investimentos Imobiliários, S.A. Its share capital of EUR 50,000 is fully paid up by ESTORIL-SOL, S.G.P.S., S.A.. The Company is now idle, but owns a site located on maritime land in the parish of Ericeira.
With a share capital of EUR 2,429,146 is 100% held by ESTORIL-SOL, S.G.P.S., S.A.. It owns a plot of land in Monte Estoril, where the former Miramar Hotel stood.
With a share capital of EUR 7,232,570, it is 100% owned by ESTORIL-SOL, S.G.P.S., S.A.. Its social object is the construction, promotion, management and sale of tourist complexes and real estate.
With a share capital of EUR 10,835,000 is 90% held by ESTORIL-SOL, S.G.P.S., S.A., with the remaining 10% being held by the company itself.
ESTORIL SOL E MAR - Investimentos Imobiliários, S.A. With a share capital of EUR 1.286.000, is fully paid up by ESTORIL-SOL, S.G.P.S., S.A..
The growth cycle of gaming revenues remained during the first nine months of 2017. The total gross game revenue of the Estoril Sol Group (territorial and online) amounted to 155,8 million Euros, with an overall growth of 12,4% (4,8% territorial game), to which significantly contributed the online gaming revenues (game revenues detailed by casino in the graphics î4.A and î4.B).
In the first nine months of 2017 the Group's Consolidated EBITDA increased by 27% and amounted to Euro 31,2 million Euros.
As at 30th September 2017 the Group reported positive consolidated net results of 15,6 million Euros — î4.C.
All the casinos in the Group improved their performances in the first nine months of 2017 compared to last year.
During the first nine months of 2017, only Casino da Póvoa recorded net negative results. To be remarked the fact that all casinos, without exception, achieved a positive EBITDA (operational results).
Casino Online started its activity in July 2016, and for this same reason shows high growth rates during 2017 — î4.D.
Pursuing a very careful selection of the investments, the Group made investments (CAPEX) during the first nine months of 2017 in the total amount of approximately 5,8 million Euros.
The increase in investment in the nine months of 2017 compared to previous years refers to the anticipation for the first half of the year of investment for the renovation of gaming equipment infographic î4.E.
In a concerted effort to financial stability and less dependence on third parties, the Group has consistently reduced its bank debt, this reduction resulted in a significant decrease in financial costs incurred by the Group.
By the end of September 2017 the Group bank debt was 16,6 million Euros — î4.F.
î 4.B Game Revenues per Casino (Jan - Sep 2016 and 2017)
In Portugal, the gambling activity in land based casinos is developed by five business groups that exploit, under a public concession, the twelve casinos existing in the national territory. In March 2017 the Casino of Ponta Delgada in the Azores started its activity. To
this date there's no information available related to game revenues due to the youth of this operation.
The Estoril-Sol Group, through its subsidiaries, operates three of the four biggest casinos in Portugal, accounting for 62% of net income generated by the activity in Portugal. Revenues from gambling in Portugal during the first nine months of 2017 amounted to approximately 233,1 million
Euros, a growth of 4,5% compared last year first semester.
In the same period the Group territorial game revenues achieved 144,4 million Euros, an increase of 4,8%.— î5.A.
On the 28thJune 2015 the online gambling regulation approved by
decree-law 66/2015 entered into force.
The issue of the first license occurred one year later, in May 2016, it was a sports betting license. The second license issued by the Turismo de Portugal took place in July 2016 and also for sports betting.
In July 2016 the first online casino license (slot machines, roulette and blackjack) was issued. This license was granted to the Estoril-Sol Group on July 25th, 2016, and the Group started operations on the same day. Since then five more licenses have been issued, totaling to this date six online casino licenses allotted. In August 2017 the Estoril-Sol Group obtained a license to operate online sports betting, and immediately started the operation. As of September 30th, 2017 there are four operators to explore online sports betting licenses.
During the first nine months of 2017, online gambling in Portugal generated gross revenues (amount of bets after deducting the premiums paid) in the overall amount of 86 million Euros. The sports betting segment accounts for 55% of the market value and generated gross revenues of 47,6
million Euros. Casino Games, including slot machines, roulette and blackjack, represent 31% of the market and generated gross revenues of 27 million Euros. Poker generated revenues of 11,4 million Euros corresponding to 14% of all online bets — î5.C.
The Estoril-Sol Group on September 30th, 2017 holds two valid licenses, a license to operate online casino games, namely, slot machines, roulette and blackjack, and a second license that allows to operate the sports betting segment. During the first nine months of 2017 Estoril-Sol recorded online gaming revenues
of 14,6 million Euros, from which 13,4 million Euros relating to online casino games and 1,2 million Euros relating to online sports betting. — î5.D e 5.E.
During the first nine months of 2017, the Group recorded combined gross game revenues, territorial and online, of 155,8 million Euros, with an overall growth of 12,4% (4,8% territorial), to which significantly contributed the online gaming revenues. Net from gaming taxes, the Group's total game revenues amounted to 76,6 million Euros, an increase of 14,7% over the 66,8 million Euros achieved in the first nine months of the previous year.
The effective tax rate borne by the Group during 2017 was 51% compared to 52% in 2016, and this was offset by the fact that online gaming revenues are taxed at a rate ranging from 15% to 30% depending on the volume of the revenues achieved.
The other operating revenues of Estoril-Sol, restaurant and entertainment, increased by 1,6% to 6,5 million Euros. The Group's 5,7% increase in operating costs reflects the Group's investment in streamlining and increasing the entertainment, leisure and restaurant offer in the casinos, but mainly reflects the strong investment in marketing and advertising carried out by the Group in the first nine months of 2017 related with the online casino operation. The Group's strong commitment and investment during 2017 and second half of 2016, proved to be essential to obtain the good results of this new operation, the online casino — 5.F.
| î 5.F Consolidated income statements | |
|---|---|
| -------------------------------------- | -- |
| Sep 2017 | Sep 2016 | Var. % | |
|---|---|---|---|
| Gaming Revenue | 155 885 791 | 138 748 669 | 12,4% |
| Special Gaming Tax | -79 241 337 | -71 921 473 | a) |
| Effective Tax Rate | 51% | 52% | |
| Game Revenue - Net | 76 644 454 | 66 827 196 | 14,7% |
| Other revenue (F&B/Entertainment) | 6 538 052 | 6 438 025 | 1,6% |
| Operating costs | -51 866 852 | -49 059 678 | 5,7% |
| EBITDA | 31 315 654 | 24 205 543 | 29,4% |
| Amortization and Depreciation | -14 484 716 | -15 616 254 | -7,2% |
| Finantial Costs | -1 145 990 | -2 266 068 | -49% |
| Income tax (IRC) | -58 614 | -52 500 | 12% |
| Consolidated Net Result | 15 626 333 | 6 270 721 | 149% |
| Equity holders of the Parent Company | 13 456 421 | 6 223 785 | |
| Non-controlling interests | 2 169 912 | 46 936 | |
| 15 626 333 | 6 270 721 |
a) Includes the amounts recorded in "Gaming Taxes" as "Special Gaming Tax (Current)" and "Annual Gaming Tax (Difference to minimum grant)"
| Estoril Casino | Lisboa Casino | Póvoa Casino | Online Casino | |
|---|---|---|---|---|
| Gaming Revenue | 47 685 108 | 62 898 800 | 33 397 318 | 11 904 565 |
| Game Taxes | -23 934 537 | -31 541 167 | -19 661 250 | -4 104 382 |
| Effective Tax Rate | 50% | 50% | 59% | 34% |
| Net Revenue | 23 750 571 | 31 357 633 | 13 736 068 | 7 800 183 |
| EBITDA | 6 580 919 | 17 829 811 | 3 525 006 | 4 361 319 |
| EBITDA Margin | 14% | 28% | 11% | 37% |
Estoril-Sol Group improve its operating results in almost 29%, and reached for the first nine months of 2017 a positive EBITDA of 31,3 million Euros. Casino Lisboa achieved a positive EBITDA of 17,8 million Euros, Estoril and Online an EBITDA of 6,5 and 4,3 million Euros, respectively, and the Casino da Póvoa registered in the first nine months of 2017 a positive EBITDA of 3,5 million Euros — 5.G.
In a concerted effort to financial stability and less dependence on third parties, the Group has been successively reducing its bank debt. This reduction resulted in a significant decrease in financial costs incurred by the Group Estoril-Sol, a decrease of 49% over the first nine months of 2017 compared to same period last year. Estoril-Sol supported almost 1,7 million Euros with loan interests during the first nine months of 2017.
The Consolidated Net Profit in the first nine months of 2017 was positive by 15,6 million Euros compared with earnings of 6,2 million Euros in the previous year. Of these 15,6 million Euros, 13,4 million Euros belong to the shareholders of Estoril-Sol, S.G.P.S., S.A., and the remainder held by minority and non-controlling interests.
• During the first quarter of 2013, after a unanimous vote taken at the headquarters of the Portuguese Association of Casinos as well as within the Board of Estoril-Sol, the operating companies from the Group Estoril-Sol, have filed lawsuits against the State in which they
seek to be restored the financial balance of Gaming Concessions. Such a claim is founded, among other reasons, because the State, through its actions and omissions has given rise to changes in circumstances that were the basis for the negotiation of the gaming concessions. Of them highlights the fact that it was assumed for tax basis a continuing and significant increase of gaming revenue throughout the concession period. Despite not having checked this proposition due to the economic climate and as a result of the State attitude in relation to online gambling and illegal gambling, among others, it continued to require them to pay very high taxes, calculated on revenue that the Concessionaires did not obtain.
Thus, remained no alternative to the Concessionaires that was not to challenge with the competent Administrative and Fiscal Courts the settlements of tax to which they were presented, and for that purpose submit the necessary judicial guarantees. However by the time of approval of this report, and despite the fact that all tax settlements were contested by the Group, all taxes are without exception, or paid or its payment was legally postponed under Decree-Law 1/2015, and for this reason the Group Estoril-Sol does not have any overdue debt related with game taxes. (note 16 and 18 to the consolidated accounts).
• The Board of Directors of Turismo de Portugal, IP, at a meeting held on 04thAugust 2017, decided under the Legal Framework for Games and Online Betting (RJO), approved by Decree-Law No. 66/2015 of 29 April, assign to Estoril Sol Digital, Online Gaming Products and Services,S.A., a license for online
sports betting, which will operate under the internet domain www.estorilsolcasinos.pt. This license shall be valid for an initial period of three years from the date of issue, expiring on August 03rd, 2020, if not renewed, under the terms and conditions set out in RJO.
Between the 30th of September 2017 and the date of this report, no relevant facts occurred that could materially affect the financial position and the future results of Estoril-Sol, S.G.P.S., S.A. and the other Companies of the Group, in addition to the reported below:
• Estoril-Sol, S.G.P.S., S.A., an issuer of securities ("shares") admitted to trading on a regulated market), now has a share capital of € 59,968,420 (fifty nine million, nine hundred and sixty eight thousand, four hundred and twenty euros), represented by 11,993,684 book-entry shares, of which: 5,876,905 are bearer, (ISINPTESO0AE0000 Code) and; 6,116,779 are registered (ISIN Code PTESO0AM0000), with a unit par value of five Euros each.
Pursuant to Articles 1, 1 and 2 of Law 15/2017, of 3 May, of Article 3 of Decree-Law 123/2017 of 25 September and of Instruction No. 1/2017 of Interbolsa, at its meeting on October 25, 2017, the Board of Directors of Estoril Sol resolved to convert these 5,876,905 "bearer" shares into "nominative" shares, with the total capital stock of the Company being represented by registered shares.
Within the terms of paragraph c) nº1 of article 246 of Portuguese Securities Code, we hereby inform you that to the best of our knowledge:
• The information contained in the interim management report is a
faithful statement of the evolution of the business, of the performance and of the position of Estoril-Sol, S.G.P.S., S.A., and the companies included within the consolidation perimeter, and contains a description of the main risks and uncertainties which they face;
• The information contained in the consolidated financial statements,
as well as their annexes, was produced in compliance with the applicable accounting standards and gives a true and fair view of the assets and liabilities, the financial situation and the results of Estoril-Sol, S.G.P.S., S.A. and the companies included in the consolidation perimeter.
Estoril, 25th October, 2017
Chairman Stanley Hung Sun Ho
Vice-Chairmen Mário Alberto Neves Assis Ferreira Patrick Wing Ming Huen
Directors Pansy Catilina Chiu King Ho Ambrose Shu Fai So Man Hin Choi António José de Melo Vieira Coelho Vasco Esteves Fraga Jorge Armindo de Carvalho Teixeira Calvin Ka Wing Chann Miguel António Dias Urbano de Magalhães Queiroz
Information regarding the securities issued by ESTORIL-SOL, S.G.P.S., S.A., and by companies with which the Company is in controlling or group relationship, which are owned by the members of the Corporate Offices of the Company on 30th September 2017.
| No. shares 31 Dec 2016 |
Date | Value (€/share) |
No. shares purchased |
No. shares sold |
No. shares 30 Sep 2017 |
|
|---|---|---|---|---|---|---|
| Board of Directors | ||||||
| Stanley Hung Sun Ho | 135 662 | - | - | - | - | 135 662 |
| Mário Alberto Neves Assis Ferreira | 601 | - | - | - | - | 601 |
| Patrick Wing Ming Huen | 55 000 | - | - | - | - | 55 000 |
| Pansy Catilina Chiu King Ho | 0 | - | - | - | - | 0 |
| Ambrose Shu Fai So | 50 000 | - | - | - | - | 50 000 |
| Man Hin Choi | 527 | - | - | - | - | 527 |
| António José de Melo Vieira Coelho | 0 | - | - | - | - | 0 |
| Vasco Esteves Fraga | 608 | - | - | - | - | 608 |
| Jorge Armindo de Carvalho Teixeira | 0 | - | - | - | - | 0 |
| Calvin Ka Wing Chann | 1 000 | - | - | - | - | 1 000 |
| Miguel António Dias Urbano de Magalhães Queiroz | 0 | - | - | - | - | 0 |
| Advisory Board | ||||||
| Rui José da Cunha | 12 300 | - | - | - | - | 12 300 |
| Audit Board | ||||||
| Manuel Maria Reis Boto | 0 | - | - | - | - | 0 |
| Vitor Prata Sevilhano Ribeiro | 0 | - | - | - | - | 0 |
| Paulo Ferreira Alves | 0 | - | - | - | - | 0 |
| Lisete Sofia Pinto Cardoso | 0 | - | - | - | - | 0 |
| Statutory Auditor | ||||||
| Pedro Miguel Argente de Freitas e Matos Gomes | 0 | - | - | - | - | 0 |
On 30th September 2017, ESTORIL SOL, S.G.P.S., S.A. held 62.565 treasury shares, and as FINANSOL - SOCIEDADE DE CONTROLO, S.G.P.S., S.A., on 30th September 2017, held 6.930.604 shares of ESTORIL-SOL, S.G.P.S., S.A., it was a direct holder of 57,79% of the share capital and 58,09% of the voting rights.
The members of the Board of Directors and of the Advisory Board of the Companies which are controlled by or grouped under ESTORIL-SOL, held 255,698 shares of ESTORIL-SOL, S.G.P.S., S.A., corresponding to 2,1% of the share capital and voting rights.
Therefore, in overall terms, the direct and indirect stake of FINANSOL in the capital of ESTORIL-SOL is 57,79%, and 60,23% to the voting rights.
On 30th September 2017, ESTORIL-SOL, S.G.P.S., S.A. held 62.565 treasury shares, and, as AMORIM – ENTERTAINMENT E GAMING INTERNATIONAL, S.G.P.S., S.A. held 3.917.793 shares, this company was a direct holder of 32,67% of the share capital and 32,84% of the voting rights of ESTORIL SOL, S.G.P.S., S.A..
Mr. José Américo Amorim Coelho, held 34,915 shares of ESTORIL-SOL, S.G.P.S., S.A., corresponding to 0,29% of the share capital and voting rights.
Therefore, in overall terms, the direct and indirect stake of AMORIM - ENTERTAINMENT E GAMING INTERNATIONAL, S.G.P.S., S.A. in the share capital of ESTORIL-SOL, S.G.P.S., S.A. was, on 30th September 2017, 32,67% and 33,13% of the voting rights.
23
(Amounts in Euros)
| Notes | Sep 2017 | Dec 2016 | |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Tangible fixed assets: | |||
| Reversible to the State | 10 | 40 765 434 | 42 654 547 |
| Not reversible to the State | 10 | 54 542 878 | 55 839 165 |
| Tax deductions on investments | (13 443 474) | (15 399 000) | |
| 81 864 839 | 83 094 712 | ||
| Intangible assets: | 11 | 47 027 000 | 55 639 395 |
| Investment properties | 194 632 | 198 795 | |
| Other non current assets | 49 236 | 41 907 | |
| TOTAL NON-CURRENT ASSETS | 129 135 705 | 138 974 809 | |
| CURRENT ASSETS | |||
| Inventories | 6 779 751 | 6 775 646 | |
| Accounts receivable - trade | 360 370 | 327 017 | |
| Other accounts receivable | 1 645 863 | 1 500 547 | |
| Cash and cash equivalents | 12 | 23 837 266 | 13 573 389 |
| TOTAL CURRENT ASSETS | 32 623 251 | 22 176 599 | |
| TOTAL ASSETS | 161 758 956 | 161 151 407 | |
| EQUITY AND LIABILITIES | |||
| EQUITY | |||
| Capital | 13 | 59 968 420 | 59 968 420 |
| Treasury shares | 13 | (708 306) | (708 306) |
| Share issue premiuns | 13 | 960 009 | 960 009 |
| Legal reserves | 7 154 428 | 6 821 678 | |
| Other reserves and retained earnings | 5 217 044 | 2 987 819 | |
| Consolidated net profit | 13 456 421 | 6 554 939 | |
| Equity attributable to the holders of the Parent Company | 86 048 017 | 76 584 558 | |
| Equity attributable to non-controlling interests | 14 | 3 318 082 | 1 148 165 |
| TOTAL EQUITY | 89 366 099 | 77 732 723 | |
| LIABILITIES | |||
| Non-current liabilities: | |||
| Financial debt | 15 | - | 1 250 000 |
| Other accounts payable | 16 | 4 310 638 | 4 310 638 |
| Provisions | 17 | 8 238 030 | 8 851 972 |
| Total non-current liabilities | 12 548 668 | 14 412 610 | |
| Current liabilities: | |||
| Financial debt | 15 | 16 697 756 | 29 100 739 |
| Other accounts payable | 16 | 43 146 432 | 39 905 336 |
| Total current liabilities | 59 844 189 | 69 006 074 | |
| TOTAL LIABILITIES | 72 392 857 | 83 418 684 | |
| TOTAL EQUITY AND LIABILITIES | 161 758 956 | 161 151 407 |
(Amounts in Euros)
| 30th September | 3rd Quarter | |||||
|---|---|---|---|---|---|---|
| Notes | 2017 | 2016 | 2017 | 2016 | ||
| REVENUE | ||||||
| Gaming revenues | 6 | 155 885 791 | 138 748 669 | 55 197 384 | 47 847 865 | |
| Gaming taxes | 6 | (79 241 337) | (71 921 473) | (28 420 223) | (24 051 313) | |
| 76 644 453 | 66 827 196 | 26 777 161 | 23 796 552 | |||
| Other operating revenue | 6 | 6 538 052 | 6 438 025 | 2 181 251 | 2 190 191 | |
| 83 182 505 | 73 265 221 | 28 958 412 | 25 986 743 | |||
| OPERATING EXPENSES | ||||||
| Cost of sales | (2 122 007) | (2 045 867) | (727 536) | (725 030) | ||
| Supplies and external services | 7 | (23 854 256) | (21 763 552) | (8 285 716) | (7 622 452) | |
| Wages and salaries | 8 | (24 259 698) | (23 296 148) | (8 383 287) | (7 811 593) | |
| Depreciation and amortization | (14 927 141) | (15 616 254) | (4 988 741) | (5 034 915) | ||
| Impairments - accounts receivable ( (increases) / reversals ) | 600 | 1 200 | 450 | 300 | ||
| Provisons ((increases)/reversals) | 17 | 442 425 | (2 488) | - | - | |
| Impairment of non-depreciable/amortizable investments | 26 165 | (4 067) | 23 408 | 2 666 | ||
| Other operating expenses | (1 657 656) | (1 948 756) | (400 853) | (382 984) | ||
| Total operating expenses | (66 351 568) | (64 675 932) | (22 762 275) | (21 574 007) | ||
| Income before financial results and taxes | 16 830 938 | 8 589 289 | 6 196 138 | 4 412 736 | ||
| FINANCIAL (LOSSES) AND GAINS | ||||||
| Financial losses | 9 | (1 179 020) | (2 290 095) | (380 305) | (660 542) | |
| Financial gains | 9 | 33 029 | 24 027 | 10 610 | 8 526 | |
| (1 145 990) | (2 266 068) | (369 694) | (652 016) | |||
| Income before taxes | 15 684 947 | 6 323 221 | 5 826 443 | 3 760 720 | ||
| Income taxes | (58 614) | (52 500) | - | (45 500) | ||
| Consolidated net income | 5 | 15 626 333 | 6 270 721 | 5 826 443 | 3 715 220 | |
| Attributable to: | ||||||
| Equity holders of the parent company | 13 456 421 | 6 223 785 | 5 593 629 | 3 668 283 | ||
| Non-controlling interests | 14 | 2 169 912 | 46 936 | 232 814 | 46 936 | |
| 15 626 333 | 6 270 721 | 5 826 443 | 3 715 220 | |||
| Net result per share | 19 | 1,13 | 0,52 | 0,47 | 0,31 |
(Amounts in Euros)
| Capital Share |
Treasury Shares | Issue Premiums | Reserve Legal |
Other reserves and retained earnings |
Consolidated of the year net result |
Total | Non-controlling (Note 14) interests |
equity Total |
|
|---|---|---|---|---|---|---|---|---|---|
| Balance at 01st January 2016 | 59 968 420 | (708 306) | 7 820 769 | 6 614 782 | (7 271 176) | 4 196 063 | 70 620 552 | - | 70 620 552 |
| Coverage of previous years losses | - | - | -6 860 760 | - | 6 860 760 | - | - | - | - |
| Application of the consolidated net profit of the year ended 31st Dec 2015 |
- | - | - | 206 896 | 1 467 887 | (4 196 063) | (2 521 280) | - | (2 521 280) |
| Acquisition of subsidiaries | - | - | - | - | - | - | - | 241 310 | 241 310 |
| Consolidated Other Comprehensive Income (OCI) of the period ended 30th Sep 2016 |
- | - | - | - | - | 6 223 785 | 6 223 785 | 46 936 | 6 270 721 |
| Balance at 30th September 2016 | 59 968 420 | (708 306) | 960 009 | 6 821 678 | 1 057 471 | 6 223 785 | 74 323 057 | 288 246 | 74 611 303 |
| Balance at 01st January 2017 | 59 968 420 | (708 306) | 960 009 | 6 821 678 | 2 987 819 | 6 554 939 | 76 584 558 | 1 148 165 | 77 732 723 |
| Application of the consolidated net profit of the year ended 31st Dec 2016 |
- | - | - | 332 750 | 2 229 226 (6 554 939) | (3 992 963) | - (3 992 963) | ||
| Consolidated Other Comprehensive Income (OCI) of the period ended 30th Sep 2017 |
- | - | - | - | - | 13 456 421 | 13 456 421 | 2 169 912 | 15 626 333 |
| Balance at 30th Sep 2017 | 59 968 420 | (708 306) | 960 009 | 7 154 428 | 5 217 044 | 13 456 421 | 86 048 017 | 3 318 082 | 89 366 099 |
(Amounts in Euros)
| 30th September | 3rd Quarter | |||||
|---|---|---|---|---|---|---|
| Notes | 2017 | 2016 | 2017 | 2016 | ||
| OPERATING ACTIVITIES | ||||||
| Receipts from clients | 161 071 520 | 142 937 506 | 57 558 106 | 49 672 488 | ||
| Payments to suppliers | (27 502 497) | (25 476 231) | (8 968 617) | (8 321 654) | ||
| Payments to staff | (20 765 567) | (20 027 215) | (6 753 545) | (6 205 402) | ||
| Cash flow generated by operations | 112 803 457 | 97 434 061 | 41 835 944 | 35 145 432 | ||
| Payment of income tax | (118 163) | (104 834) | (304) | (2 901) | ||
| Payment of Special Gaming tax | (73 801 185) | (70 092 030) | (19 877 615) | (19 490 196) | ||
| Other payments relating to the operating activity | (4 323 187) | (4 274 426) | (1 863 999) | (1 123 885) | ||
| Cash flow from operating activities (1) | 34 560 921 | 22 962 771 | 20 094 026 | 14 528 450 | ||
| INVESTING ACTIVITIES | ||||||
| Receipts from: | ||||||
| Interest and similar income | 32 173 | 24 027 | 10 194 | 8 526 | ||
| 32 173 | 24 027 | 10 194 | 8 526 | |||
| Payments in respect of: | ||||||
| Tangible fixed assets | (5 389 000) | (1 349 441) | (1 698 230) | (626 929) | ||
| Intangible assets | (14 000) | (36 000) | (14 000) | (12 000) | ||
| (5 403 000) | (1 385 441) | (1 712 230) | (638 929) | |||
| Cash flow from investment activities (2) | (5 370 827) | (1 361 414) | (1 702 036) | (630 403) | ||
| FINANCING ACTIVITIES | ||||||
| Receipts from: | ||||||
| Bank loans obtained | 362 573 355 | 254 364 061 | 180 770 763 | 61 332 184 | ||
| 362 573 355 | 254 364 061 | 180 770 763 | 61 332 184 | |||
| Payments in respect of: | ||||||
| Bank loans repaid | (376 375 503) | (270 702 715) | (194 184 527) | (71 694 861) | ||
| Interest and similar costs | (1 135 257) | (2 524 907) | (377 505) | (587 162) | ||
| Dividens | (3 988 812) | (2 512 356) | - | - | ||
| (381 499 572) | (275 739 979) | (194 562 033) | (72 282 023) | |||
| Cash flow from financing activities (3) | (18 926 217) | (21 375 918) | (13 791 270) | (10 949 839) | ||
| Variation in cash and cash equivalents (4)=(1)+(2)+(3) | 10 263 877 | 225 439 | 4 600 720 | 2 948 208 | ||
| Cash and cash equivalents at the start of the period | 12 | 13 573 389 | 10 839 350 | 19 236 546 | 8 116 580 | |
| Cash and cash equivalents at the end of the period | 12 | 23 837 266 | 11 064 787 | 23 837 266 | 11 064 787 |
The Estoril Sol Group, through its subsidiary and associated companies (Note 4), conducts business in gaming, the restaurant sector, entertainment and also real estate.
Estoril Sol, S.G.P.S, S.A. is the Holding Company of the Estoril Sol Group ("Group") and the shares representing its share capital are admitted for trading on a regulated market — the Euronext — as such, on 1 January 2005 it was obliged to prepare Consolidated Accounts pursuant to article 3 of Regulation (EC) no. 1606/2002, of the European Parliament and of the Council, of 19 July, following the Portuguese government's publication of Decree Law no. 35/2005, article 11.
The attached financial statements were prepared on the assumption of the continuity of operations, based on the books and accounting records of the companies included in the consolidation (Note 4), adjusted to comply with the provisions of the IAS 34 as adopted in the European Union and should be read together with the consolidated financial statements for the year ended 31st December 2016. The interim financial information now disclose was not subjected to an external audit or limited review.
During the period ended on 30th September 2017, there were no changes in accounting policies in relation to those used in the preparation and presentation of the financial statements of the year ended on 31st December 2016, nor were any material errors recognised relating to previous periods.
The companies included in the consolidation, their registered offices, the method of consolidation adopted and the proportion of the capital effectively held on 30th September 2017 and 31st December 2016 are the following:
| Method of | Effective percentage of the capital held | ||||
|---|---|---|---|---|---|
| Name | Head Office | consolidation | Sep 2017 | Dec 2016 | |
| Estoril-Sol, S.G.P.S., S.A. | Estoril | Integral | Holding Co. | Holding Co. | |
| Estoril-Sol (III) - Turismo, Animação e Jogo, S.A. | Estoril | Integral | 100 | 100 | |
| Varzim Sol - Turismo, Jogo e Animação, S.A. | Póvoa de Varzim | Integral | 100 | 100 | |
| Estoril-Sol V - Investimentos Imobiliários, S.A. | Estoril | Integral | 100 | 100 | |
| DTH - Desenvolvimento Turistico e Hoteleiro, S.A. | Estoril | Integral | 100 | 100 | |
| Estoril-Sol Imobiliária, S.A. | Estoril | Integral | 100 | 100 | |
| Estoril-Sol - Investimentos Hoteleiros, S.A. | Estoril | Integral | 100 | 100 | |
| Estoril-Sol e Mar - Investimentos Imobiliários, S.A. | Estoril | Integral | 100 | 100 | |
| Estoril-Sol Digital, Online Gaming Products and Services, S.A. | Estoril | Integral | 50 | 50 |
Within the online gaming activities, which is carried out through Estoril Sol Digital, Online Gaming Products and Services, S.A, a subsidiary company of Estoril Sol (III) – Turismo, Animação e Jogo, S.A., a company owned by the issuer (Estoril-Sol, S.G.P.S., S,A,), signed with Vision Gaming Holding Limited, a company based in Malta, an association agreement, through which it holds a minority interest, corresponding to 49.9998% of the share capital of Estoril Sol Digital, keeping the Estoril Sol (III) S.A. most of the capital and votes in that company (Estoril Sol Digital, Online Gaming Products and Services, S.A.).
Estoril-Sol, S.G.P.S., S.A. indirectly held on the 01st January 2016, 33.33% of the company Parques do Tamariz, S.A., through Estoril Sol Imobiliária, S.A.
These holdings are presented at the value resulting from the equity pick-up method. Using this method, the financial statements include the part attributable to the Estoril Sol Group of the results recognised from the date on which the significant influence starts up to the date on which it effectively ends. Associate companies are entities in which the Estoril Sol Group has between 20% and 50% of the voting rights, or in which the Group has significant influence.
During the first quarter of 2016 the subsidiary company Parques do Tamariz, was dissolved, as it had no longer any assets and did not engage any economic activity. No additional losses resulted from this operation to the Group Estoril-Sol.
The segments reportable by the Group are based on the identification of segments in line with the financial information that is reported internally to the Board of Directors and which supports the Board in its evaluation of the performance of the businesses and in taking decisions with regard to the allocation of the resources to be used. The segments identified by the Group for reporting by segments, are therefore consistent with the way in which the Board of Directors analyses its business, corresponding to:
On 30th September 2017 and 2016, the information by business segment, is as follows:
| 30th September 2017 | ||
|---|---|---|
| -- | --------------------- | -- |
| Rubrica | Estoril Game Concession | Sub-Total | Póvoa Casino |
Online Casino |
Other | Total | |
|---|---|---|---|---|---|---|---|
| Estoril Casino |
Lisboa Casino |
||||||
| Net assets | 29 619 879 | 78 197 515 | 107 817 394 | 38 840 265 | 11 428 937 | 3 672 360 | 161 758 956 |
| Net liabilities | 13 052 114 | 21 006 691 | 34 058 806 | 28 086 617 | 4 792 757 | 5 454 677 | 72 392 857 |
| Result of the segment | 630 232 | 13 036 816 | 13 667 047 | (1 561 452) | 4 339 841 | (819 103) | 15 626 333 |
| Investment assets: | |||||||
| Tangible fixed | 1 539 554 | 2 620 046 | 4 159 600 | 1 692 973 | 23 842 | - | 5 876 415 |
| Intangible | - | - | - | - | 14 000 | - | 14 000 |
| Rubrica | Estoril Game Concession | Póvoa Sub-Total Casino |
Online | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Estoril Casino |
Lisboa Casino |
Casino | Other | Total | |||||
| Net assets | 34 604 334 | 78 033 193 | 112 637 527 | 40 938 942 | 1 562 812 | 7 518 186 | 162 657 467 | ||
| Net liabilities | 21 404 350 | 30 010 920 | 51 415 270 | 29 737 888 | 986 318 | 5 333 194 | 87 472 670 | ||
| Result of the segment | (1 001 006) | 10 630 334 | 9 629 328 | (2 380 082) | 93 873 | (1 072 398) | 6 270 722 | ||
| Investment assets: | |||||||||
| Tangible fixed | 514 435 | 120 755 | 635 189 | 1 125 065 | 23 095 | - | 1 783 349 | ||
| Intangible | - | - | - | - | 36 000 | - | 36 000 |
The consolidated operating income, in the periods ended on 30th September 2017 and 2016, is split in the following manner:
| Estoril Game Concession | Póvoa Game Concession |
Online | ||||
|---|---|---|---|---|---|---|
| Nature | Estoril Casino |
Lisboa Casino |
Sub-Total | Póvoa Casino |
Casino | Total |
| Gaming revenues: | ||||||
| Slot Machines | 36 651 660 | 50 500 673 | 87 152 333 | 28 036 079 | 10 761 921 | 125 950 333 |
| Table based gaming | 11 217 414 | 12 581 661 | 23 799 075 | 5 425 155 | 2 679 508 | 31 903 738 |
| Sports betting | - | - | - | - | 1 283 304 | 1 283 304 |
| Bonuses and other fair value adjustments | (183 966) | (183 534) | (367 500) | (63 916) | (2 820 168) | (3 251 584) |
| 47 685 108 | 62 898 800 | 110 583 908 | 33 397 318 | 11 904 565 | 155 885 791 | |
| Gaming taxes: | ||||||
| Special Gaming Tax (current) | (23 934 537) | (31 541 167) | (55 475 705) | (16 730 617) | (4 104 382) | (76 310 704) |
| Annual Gaming Tax (difference to minimum grant) | - | - | - | (2 930 633) | - | (2 930 633) |
| (23 934 537) | (31 541 167) | (55 475 705) | (19 661 250) | (4 104 382) | (79 241 337) | |
| Other operating revenues: | ||||||
| F&B and Entertainment | 3 069 123 | 491 289 | 3 560 412 | 737 632 | - | 4 298 044 |
| Tax deductions - Entertainment | 861 191 | 630 823 | 1 492 014 | 499 105 | - | 1 991 119 |
| Supplementary income | 169 303 | 27 053 | 196 357 | 48 948 | - | 245 305 |
| Other | 0 | 0 | 0 | 3 584 | - | 3 584 |
| 4 099 617 | 1 149 166 | 5 248 783 | 1 289 269 | - | 6 538 052 | |
| 27 850 188 | 32 506 799 | 60 356 986 | 15 025 337 | 7 800 183 | 83 182 505 |
| September 2016 | ||||||
|---|---|---|---|---|---|---|
| Nature | Estoril Game Concession | Póvoa Game Concession |
Online | |||
| Estoril Casino |
Lisboa Casino |
Sub-Total | Póvoa Casino |
Casino | Total | |
| Gaming revenues: | ||||||
| Slot Machines | 34 262 306 | 49 052 907 | 83 315 213 | 27 113 888 | 1 234 485 | 111 663 586 |
| Table based gaming | 10 398 319 | 11 183 448 | 21 581 767 | 5 689 373 | 677 284 | 27 948 424 |
| Bonuses and other fair value adjustments | 11 894 | (135 170) | (123 276) | (47 768) | (692 297) | (863 341) |
| 44 672 519 | 60 101 185 | 104 773 704 | 32 755 493 | 1 219 472 | 138 748 669 | |
| Gaming taxes: | ||||||
| Special Gaming Tax (current) | (22 330 313) | (30 118 178) | (52 448 490) | (16 401 631) | (287 982) | (69 138 102) |
| Annual Gaming Tax (difference to minimum grant) | - | - | - | (2 783 370) | - | (2 783 370) |
| (22 330 313) | (30 118 178) | (52 448 490) | (19 185 001) | (287 982) | (71 921 473) | |
| Other operating revenues: | ||||||
| F&B and Entertainment | 2 947 693 | 487 073 | 3 434 766 | 700 939 | - | 4 135 705 |
| Tax deductions - Entertainment | 829 106 | 602 364 | 1 431 470 | 567 977 | - | 1 999 447 |
| Supplementary income | 221 863 | 27 554 | 249 418 | 46 258 | - | 295 676 |
| Other | 5 675 | 27 | 5 702 | 1 496 | - | 7 198 |
| 4 004 338 | 1 117 018 | 5 121 355 | 1 316 670 | - | 6 438 025 | |
| 26 346 544 | 31 100 025 | 57 446 570 | 14 887 163 | 931 490 | 73 265 221 |
Income from the segments comes from transactions with external customers. There are no transactions between segments. The accounting policies of each segment are the same as those of the Group.
In the periods ended on 30th September 2017 and 2016, external supplies and services were as follows:
| Sep 2017 | Sep 2016 | |
|---|---|---|
| Advertising | 3 415 845 | 1 962 158 |
| Gifts to customers | 3 292 716 | 3 280 505 |
| Subcontracts | 2 773 979 | 2 527 232 |
| Energy and other fluids | 2 172 943 | 2 157 924 |
| Cleaning and laundry | 1 841 057 | 1 786 059 |
| Conservation and repairs | 1 769 061 | 2 013 259 |
| Specialized work | 1 564 947 | 1 737 002 |
| Royalties | 1 519 478 | 1 560 741 |
| Surveillance and security | 1 270 376 | 1 214 453 |
| Fees | 977 915 | 406 099 |
| Rents | 856 885 | 924 651 |
| Financial services (comissions) | 850 005 | 365 906 |
| Insurance | 484 745 | 485 895 |
| Communication | 400 350 | 351 219 |
| Travel and hotels | 194 169 | 175 519 |
| Other | 469 785 | 814 930 |
| 23 854 256 | 21 763 552 |
In the periods ended on 30th September 2017 and 2016, staff costs were as follows:
| Sep 2017 | Sep 2016 | |
|---|---|---|
| Remuneration of governing bodies | 2 192 320 | 2 217 608 |
| Remuneration of staff | 16 467 814 | 15 669 622 |
| Indemnities | 66 888 | 62 904 |
| Charges on remuneration | 4 233 060 | 4 064 134 |
| Insurance | 150 988 | 133 840 |
| Social charges | 870 682 | 826 830 |
| Other | 277 947 | 321 210 |
| 24 259 698 | 23 296 148 |
Financial costs and income for the periods ended on 30th September 2017 and 2016 is broken down as follows:
| Sep 2017 | Sep 2016 | |
|---|---|---|
| FINANCIAL COSTS | ||
| Juros suportados: | ||
| Financing from banks | (585 123) | (1 461 083) |
| Finance and operating leasing | (123 453) | (51 875) |
| (708 576) | (1 512 958) | |
| Other financing costs: | ||
| Comissions and similar charges | (470 444) | (777 137) |
| (1 179 020) | (2 290 095) | |
| FINANCIAL INCOME | ||
| Exchange gains | 13 920 | 16 941 |
| Other | 19 109 | 7 086 |
| 33 029 | 24 027 | |
| NET FINANCIAL COSTS | (1 145 990) | (2 266 068) |
During the periods ended on 30th September 2017 and 2016, the movement in tangible assets, as well as in the respective depreciation and accumulated impairment losses, was as follows:
| January to September 2017 | |||
|---|---|---|---|
| Land | Buildings and other constructions |
Basic equipment |
Vehicles | Office equipment |
Other tangible fixed assets |
Fixed assets in progress |
Total | |
|---|---|---|---|---|---|---|---|---|
| Gross amount: | ||||||||
| Opening balance | 16 513 836 197 483 576 120 255 229 | 66 744 | 4 386 179 | 82 292 | 1 780 940 340 568 796 | |||
| Acquisitions | - | 664 | 1 740 179 | - | 22 260 | - | 4 113 312 | 5 876 415 |
| Adjustments / Transfers | - | - | 26 225 | - | - | - | - | 26 225 |
| Write-off | - | - | (1 716 670) | (46 000) | (35 627) | - | - | (1 798 297) |
| Closing balance | 16 513 836 197 484 240 120 304 963 | 20 744 | 4 372 812 | 82 292 | 5 894 252 344 673 139 | |||
| Depreciation and accumulated impairment losses: | ||||||||
| Opening balance | - 136 741 249 101 349 388 | 54 615 | 3 874 707 | 81 359 | - 242 101 318 | |||
| Depreciation of the year | - | 5 135 757 | 3 783 406 | 1 473 | 130 259 | - | - | 9 050 895 |
| Write-off | - | - | (1 716 407) | (35 344) | (35 635) | - | - | (1 787 386) |
| Closing balance | - 141 877 006 103 416 387 | 20 744 | 3 969 331 | 81 359 | - 249 364 827 | |||
| Net amount | 16 513 836 | 55 607 234 | 16 888 576 | - | 403 481 | 933 | 5 894 252 | 95 308 312 |
| January to September 2016 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Land | Buildings and other constructions |
Basic equipment |
Vehicles | Office equipment |
Other tangible fixed assets |
Fixed assets in progress |
Total | |
| Gross amount: | ||||||||
| Opening balance | 16 513 836 197 253 396 119 447 590 | 66 744 | 4 330 748 | 82 292 | 131 617 | 337 826 223 | ||
| Acquisitions | - | 163 152 | 1 543 986 | - | 54 575 | - | 21 636 | 1 783 349 |
| Adjustments / Transfers | - | 59 627 | - | - | - | - | - | (60 938) |
| Write-off | - | - | (225 302) | - | (2 704) | - | (120 565) | (228 006) |
| Closing balance | 16 513 836 197 476 175 120 766 274 | 66 744 | 4 382 619 | 82 292 | 32 688 | 339 320 628 | ||
| Depreciation and accumulated impairment losses: | ||||||||
| Opening balance | - 129 470 334 | 97 760 983 | 45 412 | 3 682 050 | 80 995 | - | 231 039 774 | |
| Depreciation of the year | - | 5 547 046 | 4 322 801 | 6 994 | 157 064 | 361 | - | 10 034 266 |
| Write-off | - | - | (211 823) | - | (2 712) | - | - | (214 535) |
| Closing balance | - 135 017 380 101 871 961 | 52 406 | 3 836 402 | 81 356 | - | 240 859 505 | ||
| Net amount | 16 513 836 | 62 458 795 | 18 894 313 | 14 338 | 546 217 | 936 | 32 688 | 98 461 125 |
The breakdown of intangible assets on 30th September 2017 and 31st December 2016 is as follows:
| Sep 2017 | |||||||
|---|---|---|---|---|---|---|---|
| Gaming Concession | Gross assets | Accumulated Amortization |
Net Assets | ||||
| Estoril Gaming Concession | |||||||
| Estoril Casino | 153 576 455 | (134 415 516) | 19 160 939 | ||||
| Lisboa Casino | 30 000 000 | (23 184 235) | 6 815 765 | ||||
| Póvoa Gaming Concession - Póvoa Casino | 77 034 109 | (56 018 875) | 21 015 234 | ||||
| 260 610 564 | (213 618 626) | 46 991 938 | |||||
| Intangible assets - Online gaming license (a) | 36 000 | (14 200) | 21 800 | ||||
| Intangible assets - Online sports betting (b) | 14 000 | (738) | 13 262 | ||||
| 260 660 564 | (213 633 564) | 47 027 000 | |||||
| Dec 2016 | ||||||
|---|---|---|---|---|---|---|
| Gaming Concession | Gross assets | Accumulated Amortization |
Net Assets | |||
| Estoril Gaming Concession | ||||||
| Estoril Casino | 153 576 455 | (129 776 774) | 23 799 681 | |||
| Lisboa Casino | 30 000 000 | (21 641 378) | 8 358 622 | |||
| Póvoa Gaming Concession - Póvoa Casino | 77 034 109 | (53 583 817) | 23 450 292 | |||
| 260 610 564 | (205 001 969) | 55 608 595 | ||||
| Intangible assets - Online gaming license (a) | 36 000 | (5 200) | 30 800 | |||
| 260 646 564 | (205 007 169) | 55 639 395 |
(a) The Board of Directors of Turismo de Portugal, IP, at a meeting held on 25 July 2016, decided under the Legal Framework for Games and Online Betting (RJO), approved by Decree-Law No. 66/2015 of 29 April, assign to Estoril Sol Digital, Online Gaming Products and Services, S.A., a license for online gambling exploration, which will operate under the internet domain www.estorilsolcasinos.pt/ . This license shall be valid for an initial period of three years from the date of issue, expiring on July 24th, 2019, if not renewed,
under the terms and conditions set out in RJO. Estoril Sol Digital, began exploring the online gambling activity in the web site mentioned above on the same day the license was issued, ie 25th July 2016.
(b) The Board of Directors of Turismo de Portugal, IP, at a meeting held on 4 August 2017, decided under the Legal Framework for Games and Online Betting (RJO), approved by Decree-Law No. 66/2015 of 29 April, assign to Estoril Sol Digital, Online Gaming Products and Services, S.A., a license for online sports betting, which will operate under the internet domain www.estorilsolcasinos.pt. This license shall be valid for an initial period of three years from the date of issue, expiring on August 03rd, 2020, if not renewed, under the terms and conditions set out in RJO. Estoril Sol Digital, began exploring the online sports betting activity in the web site mentioned above on the 06th August 2017.
On 30th September 2017 and 31st December 2016, this caption was broken down as follows:
| Sep 2017 | Dec 2016 |
|---|---|
| 8 510 056 | 8 696 631 |
| 7 327 210 | 3 657 733 |
| 8 000 000 | 1 200 000 |
| - | 19 025 |
| 23 837 266 | 13 573 389 |
| - | - |
| 23 837 266 | 13 573 389 |
On 30th September 2017 and 31st December 2016, the share capital of the Company is represented by 11.993.684 shares, of which 6.116.779 are registered shares and 5.876.905 bearer shares, of a nominal unit value of 5 Euros, which confer the right to a dividend.
The share capital issued by the Company on 30th September 2017 and on 31st December 2016 is broken down as follows:
| Sep 2017 | Dec 2016 | |
|---|---|---|
| Share capital | 59 968 420 | 59 968 420 |
| Treasury shares | (708 306) | (708 306) |
| Issue premiums | 960 009 | 960 009 |
| 60 220 123 | 60 220 123 |
| Date | Nominal value | No. of shares |
|---|---|---|
| 30th of September 2017 | ||
| Registered | 5€ | 6 116 779 |
| Bearer | 5€ | 5 876 905 |
| 11 993 684 | ||
| 31st of December 2016 | ||
| Registered | 5€ | 6 116 779 |
| Bearer | 5€ | 5 876 905 |
| 11 993 684 |
Treasury shares were acquired by the Company as follows:
| Year of Acquisition | No. of shares | Nominal value | Total nominal | Total premiums | Total |
|---|---|---|---|---|---|
| 2001 | 34 900 | 5 | 174 500 | 280 945 | 455 445 |
| 2002 | 43 | 5 | 215 | 184 | 399 |
| 2007 | 22 | 5 | 110 | 88 | 198 |
| 2008 | 27 600 | 5 | 138 000 | 114 264 | 252 264 |
| Total | 62 565 | 312 825 | 395 481 | 708 306 |
Legal persons with more than a 20% holding in the share capital:
On 30th September 2017 and 31st December 2016, this caption was broken down as follows:
| Sep 2017 | |||||
|---|---|---|---|---|---|
| Company | Equity | Profit/(Loss) of the period | Book value of non-controlling interests |
Proportion in income attributable to non-controlling interests |
|
| Estoril-Sol Digital, Online Gaming Products and Services, S.A. |
6 636 180 | 4 339 841 | 3 318 082 | 2 169 912 | |
| Dec 2016 | |||||
| Company | Equity | Profit/(Loss) of the period | Book value of non-controlling interests |
Proportion in income attributable to non-controlling interests |
|
| Estoril-Sol Digital, Online Gaming Products and Services, S.A. |
2 296 340 | 1 813 718 | 1 148 165 | 906 859 |
Within the online gaming activities, which is carried out through Estoril Sol Digital, Online Gaming Products and Services, S.A, a subsidiary company of Estoril Sol (III) – Turismo, Animação e Jogo, S.A., a company owned by the issuer (Estoril-Sol, S.G.P.S., S.A.), signed with Vision Gaming Holding Limited, a company based in Malta, an association agreement, through which it holds a minority interest, corresponding to 49.9998% of the share capital of Estoril Sol Digital, keeping the Estoril Sol (III) S.A. most of the capital and votes in that company (Estoril Sol Digital, Online Gaming Products and Services, S.A.).
| Sep 2017 | Dec 2016 | ||||
|---|---|---|---|---|---|
| Nature of the financing | Nominal value | Balance sheet value | Nominal value | Balance sheet value | |
| Non-current financing: | |||||
| Bank loans | - | - | 1 250 000 | 1 250 000 | |
| - | - | 1 250 000 | 1 250 000 | ||
| Current financing: | |||||
| Bank loans | - | - | 7 688 648 | 7 710 499 | |
| Commercial paper | 4 500 000 | 4 630 956 | 2 500 000 | 2 449 228 | |
| Current accounts | 12 066 800 | 12 066 800 | 18 930 300 | 18 930 300 | |
| Financial leasing | - | - | 10 712 | 10 712 | |
| 16 566 800 | 16 697 756 | 29 129 660 | 29 100 739 | ||
| 16 566 800 | 16 697 756 | 30 379 660 | 30 350 739 |
On 30th September 2017 and 31st December 2016, this caption was broken down as follows:
The average interest rates for financing, borne by the Group, including commissions and other charges, come within an interval of between 2% and 4,1%.
Some of the financing operations, mainly bank loans, include commitments to maintain certain financial ratios based on contractually negotiated limits (financial covenants).
These ratios are:
On the 30th September 2017 and 31st December 2016, these ratios were according the contractually negotiated limits.
Depending on the operating funds that are freed up, we feel the financial risk to which the associated undertakings are exposed is minimal, and the same understanding has prevailed in the examination carried out by financial institutions, as shown by the fact that assets guarantees are dispensed with for operations under contract.
The amount included in the column "Nominal value" corresponds to the contracted value that is still owing. The column "Balance sheet value" is added to the nominal value of financial charges already incurred but still not due, less interest and or commissions paid in advance.
On 30th September 2017 and 31st December 2016, this caption was broken down as follows:
| Sep 2017 | Dec 2016 | |
|---|---|---|
| OTHER ACCOUNTS PAYABLE - NON-CURRENT | ||
| Annual payment - Difference to minumum grant | ||
| Installments payment schedule - approved for 2014 | 3 734 424 | 3 734 424 |
| Installments payment schedule - approved for 2015 | 576 214 | 576 214 |
| 4 310 638 | 4 310 638 | |
| OTHER ACCOUNTS PAYABLE - CURRENT | ||
| Current suppliers | 4 633 132 | 5 382 419 |
| Suppliers of investments | 1 149 289 | 1 100 635 |
| State and Public Sector | ||
| Annual gaming payment | 13 652 384 | 11 606 867 |
| Annual payment - Difference to minumum grant | ||
| Decree 1/2015 - 10% over 50% rate of the annual gaming payment | 2 930 632 | 3 241 292 |
| Installments payment schedule - approved for 2015 | 576 215 | 576 215 |
| Special Gaming Tax (to be paid next month) | 6 646 475 | 6 541 148 |
| Social Security contribuitons | 621 328 | 611 667 |
| Other in favour of the State | 830 800 | 1 112 534 |
| Clients advance payments | 1 233 846 | 338 736 |
| Charges with holidays payable | 4 820 158 | 4 540 311 |
| Responsabilities for accumulated gaming premiums | 2 019 626 | 1 872 791 |
| Other | 4 032 547 | 2 980 721 |
| 43 146 432 | 39 905 336 |
The value of "Clients advance payments" relate entirely to the online casino and refer to the balance of the internet website of the online casino, available for playing or withdraw at 23:59; 30th September 2017 and 31st December 2016.
The Decree Law n º 29/88 of 3 August, down in paragraph 1 of Article 3, the concessionaire is obliged to pay an annual payment amounting to 50% of the gross gaming revenues. This payment cannot be, under any circumstances, lower than the values in the table attached to that Decree Law.
The minimum annual contributions were established (prices of the year 2000) by Decree-Law No. 275/2001 of 14th December 2001, by the time the Concessions Contracts were extended by fifteen years more.
At the beginning of the year 2015 the Regulatory-Decree nº1/2015 of 21st January came to approve the split payment in instalments of the annual minimum contributions calculated based on Decree-Law 275/2001, subject to prior approval from "Turismo de Portugal" of the payments schedule proposed by the Game Concessionaire Companies.
The Regulatory-Decree nº1/2015 was applied for the first the time to the amounts related to the year ended December 2014, which initially payment deadline was on January 31st, 2015.
The value 4.310.638 Euros registered in the caption "Other accounts payable – non-current", as "Annual payment – difference to minimum grant" is related to the following instalment payment schedules in accordance with a prior authorization from Turismo de Portugal:
• Instalments payment schedule - approved for 2014, that will be paid in three equal annual instalments of 1.244.808 Euros, on December 31st, 2019, 2020 and 2021.
• Instalments payment schedule - approved for 2015, that will be paid in three equal annual instalments of 576.215 Euros, on December 31st, 2016, 2017 and 2018. The instalment due in 2017 is recorded as "Other accounts payable – current".
The movement in the provisions accounts in the periods ended on 30th September 2017 and 2016 is as follows:
| Opening Balance |
Increases | Reversals | Writte-off | Closing Balance |
|
|---|---|---|---|---|---|
| Provisions for pensions | 2 899 650 | - | - | (37 411) | 2 862 239 |
| Legal proceedings in hand | 5 383 224 | 123 719 | (566 144) | (134 106) | 4 806 693 |
| Other risks and charges | 569 098 | - | - | - | 569 098 |
| 5 952 322 | 123 719 | (566 144) | (134 106) | 5 375 791 | |
| 8 851 972 | 123 719 | (566 144) | (171 517) | 8 238 030 |
The reversals of provisions that occurred during the first nine months of 2017 mostly relate to civil lawsuits related to claims for compensation of players with requests for self-exclusion, and where court judgments have come to co-account the player in a percentage greater than that originally provided by the Group.
| Opening Balance |
Increases | Reversals | Writte-off | Closing Balance |
|
|---|---|---|---|---|---|
| Provisions for pensions | 3 522 023 | - | - | (37 410) | 3 484 613 |
| Legal proceedings in hand | 4 193 142 | 2 488 | - | (260 273) | 3 935 357 |
| Other risks and charges | 569 098 | - | - | - | 569 098 |
| 4 762 240 | 2 488 | - | (260 273) | 4 504 455 | |
| 8 284 263 | 2 488 | - | (297 683) | 7 989 068 |
In the normal course of its activity, the Group is involved in diverse legal proceedings. Given the nature of these and the provisions set up, in accordance with studies and opinions of legal consultants, the current expectation is that the respective outcome will not lead to any material effects in terms of the activity undertaken, the asset position and the result of the operations.
The main situations are the following:
• Differences in understanding between the Group and the Tax Authorities over Corporation Tax (IRC), relating to the years 2007, 2008, 2009 and 2010, with regard to the taxation of undocumented expenses in-curred in the course of the gaming activity of subsidiaries that form part of the Group and which operate games of fortune as their main activity. During the year 2013 occurred the 1st instance verdict contrary to the allegations and convictions of the Group relating to the process for the years 2007 to 2009. It is the Company's belief, grounded in favourable opinions from legal advisers, that a final decision should be favourable, which is why the Group appealed to higher courts. On the date of these financial statements there are also previous legal decisions that are in the Group's favour, as well as judicial jurisprudence which is favourable to the Group on this matter. Even so, on this date the Group has bank guarantees provided in favour of the Finance Office of Cascais amounting to 7.197.635 Euros.
• One of the subsidiaries of the Group made a collective dismissal in 2010 within the terms established in the Law, which affected 112 employees. Some of these contested this procedure and filed a lawsuit in Court trying to have this overturned and for their reintegration as Company staff. The Company and the legal consultants responsible for the case consider that there is a high probability of the Company winning and, therefore, it has set up a provision corresponding only to the legal obligations allowed for in labour legislation in cases of collective dismissal which it will have to pay to the former employees by way of indemnity evens if it wins the case. As at 30th September 2017 there are 24 former employees with pending litigation related with this dismissal. The provision accrued within the accounts amounts to 692.264 Euros.
• One of the subsidiaries of the Group made a collective dismissal in 2013 within the terms established in the Law, which affected 21 employees. Some of these contested this procedure and filed a lawsuit in Court trying to have this overturned and for their reintegration as Company staff. The Company and the legal consultants responsible for the case consider that there is a high probability of the Company winning and, therefore, it has set up a provision corresponding only to the legal obligations allowed for in labour legislation in cases of collective dismissal which it will have to pay to the former employees by way of indemnity evens if it wins the case. As at 30th September 2017 there are 13 former employees with pending litigation related with this dismissal. The provision accrued within the accounts amounts to 344.500 Euros.
The Group also sets up diverse technical provisions related with the normal functioning of its main activity, the operation of games of fortune. Among the more significant ones we should highlight:
• The existence of an account payable for a total amount of 2.019.626 Euros in respect of liabilities for accumulated gaming premiums. These liabilities are revised on a monthly basis, according to the accumulated premiums announced in the diverse gaming rooms of the Casinos run by the Group (Note 16).
On 30th September 2017 and 31st December 2016 the guarantees provided by the Group were as follows:
| Sep 2017 | Dec 2016 | |
|---|---|---|
| Obligations related with the Special Gaming Tax | 7 850 000 | 24 494 052 |
| Tax lawsuits in hand / litigation | 7 414 888 | 7 414 888 |
| Current suppliers | 39 250 | 39 250 |
| 15 304 138 | 31 948 190 |
During the first quarter of 2017 the Group saw its responsabilities with bank guarantees reduced by 17,2 million Euros, as they were related with the Special Game Tax from the year ended 31st December 2016 paid during January 2017 (Note 16).
The consolidated result per basic share of the years ended on 30th September 2017 and 2016 was determined as follows:
| Sep 2017 | Sep 2016 | |
|---|---|---|
| Net profit of the Equity holders of the Parent Company | 13 456 421 | 6 223 785 |
| Average weighted number of shares in circulation | 11 931 119 | 11 931 119 |
| Result per basic share | 1,13 | 0,52 |
Due to the fact that there are no situations that cause dilution, the net result per diluted share is the same as the net result per basic share.
ESTORIL-SOL, S.G.P.S., S.A.
Capital social integralmente realizado 59.968.420 Euros Sociedade Anónima com sede na Av. Dr. Stanley Ho Edifício do Casino Estoril, 2765-190 Estoril - Cascais
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