GEORGE TOWN: Electronic gaming machine and equipment maker RGB International Bhd is eyeing new businesses in Europe and South America, as the company seeks to expand its market reach.
RGB derives 95% of its sales from the Asia-Pacific region.
“We want to move away from our traditional markets to broaden the revenue base for the group,” said group managing director Datuk Chuah Kim Seah (pic).
The company, he said had secured orders for 700 units of gaming machines valued at RM80mil for the first half 2016.
About 500 units had been delivered to customers.
“The remaining 200 will be delivered in the third quarter. With the delivery of the 700 units, we are projecting double-digit percentage growth over last year’s net profit,” he told StarBiz.
The sales of gaming machines made up about 70% of the group’s revenue, while the remainder was contributed by the RGB’s gaming concession programme, which included the leasing of machines and equipment.
Chuah said the group was targeting to sell more machines than last year’s 1,300 units, which generated RM145mil in revenue.
For the second half, the group had 400 more gaming machines with an estimated market value RM45mil to deliver before the end of the year.
“The total undelivered units to date is 600, which includes the 200 yet to be delivered units secured in the first half.
“To surpass last year’s goal, we need to secure sales for 300 more units,” he said.
On RGB’s concession business, the leasing of the machines in the Asia region is expected to generate RM7.6mil per month for 2016, compared with RM7mil in 2015.
RGB leases its gaming machines to customers in Indochina, the Philippines, Timor Leste and Nepal.
“The Philippines is one of the largest markets for us,” he said.
Chuah said the group would be leasing machines soon under its concession programme to Kathmandu, which is a new market for the group.
“The machines are ready to be shipped out and should be operational by the fourth quarter,” he said.
RGB reported a 37% increase in net profit to RM5.9mil in the first quarter ended March 31, as revenue improved 45% to RM56mil.
Meanwhile, the group has settled the remaining RM27mil debts owed under the Commercial Papers Medium Term Notes (CPMTN) programme ahead of the scheduled final payment due in 2019.
“The group has more than RM60mil cash in hand, after settling the CPMTN debts,” Chuah said.
This cashpile will come in handy as the group explores opportunities in new markets.
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