EEG takes $38.6m impairment charge on failing assets

Esports Entertainment Group has posted net revenue of $15.7m for Q1 2022, up 8% sequentially. Gross profit was also up 18% at $9.4m for the first quarter of 2022. 

eeg generic logo gi web image
Listen To Article

However, the operator has been hit with a $38.6m impairment charge on several failing assets, particularly its esports assets Helix, ggCircuit and EGL, meaning its overall Q1 report is less positive.  

Its CEO, Grant Johnson, has attributed the company’s inability to monetise these assets to its “lack of liquidity.” The impairment charge has affected the operator’s adjusted EBITDA, which was negative $7.3m. 

Alongside the charge, Esports Entertainment’s EBITDA was hit by $20.6m for a derivative debt liability. 

As a result, the operator implied that it will attempt to offload at least one of its assets. 

Johnson revealed: “We do not see a path to attractive profitability in the Helix business, given its significant overhead and ongoing CapEx, and are currently working to divest our two existing centres; ggCircuit and EGL are two assets that we have not effectively been able to monetise due to liquidity constraints.  

“Our team is working internally to properly forecast the long-term opportunity for these businesses, which will allow us to better establish their carrying value.” 

Offloading these brands would help the operator to “dramatically simplify” its offering in the esports space.

This is something Johnson feels is necessary, to extend liquidity in the short term while simultaneously moving toward the company’s long-term “operational and profitability goals.” 

Industry News Sponsor
Premium+ Connections
Premium
 
Premium
 
Premium
 
 
Premium
 
Premium
 
Premium
 
Premium
 
Premium
 
Premium
 
Premium
 
 
Premium
 
Premium
 
Premium
 
Premium
 
Premium
 
Premium
 
Premium
 
Premium
 
Premium Connections
Executive Profiles
Interblock
Caesars Entertainment
Pragmatic Play
Flutter Entertainment

Global Gaming Awards London: Who will win Executive of the year 2023?

Gambling Insider takes a look at the nominations list for 20...

CEO Special: Flutter International CEO Dan Taylor returning to roots

Flutter International CEO Dan Taylor meets Louis Thompsett t...

CEO Special: Light & Wonder Gaming CEO Siobhan Lane - optimising superpowers

Siobhan Lane, Light & Wonder Gaming CEO, speaks to Gambling...

CEO Special: Hoiana Resorts' Steve Wolstenholme – the travel man

Hoiana President & CEO Steve Wolstenholme talks to Gambling...

Read Magazine