Tumbling Asian investments drag on game software firm

A FALL in the value of investments in Asia contributed to a €7 million loss at gaming software specialist Cryptologic in the first six months of the year.

Cryptologic yesterday published results for the first half of 2009, which covered a period of reorganisation at the Irish-based group aimed at returning it to profitability over the next six months.

The company lost $10 million (€7 million) before tax in the first six months of the year. The figure included a once-off $4 million write down of the value of investments in Asia, following a review which it undertook during the six-month period.

In a statement yesterday, Cryptologic pointed out that the $4 million loss was “non-cash”. The write down meant it recorded a $6.2 million deficit for the second quarter – from the end of March to the end of June – compared with a $1.2 million loss during the same period in 2008.

Its basic loss per share was 56 cents in the first half of 2009, compared with 4 cents during the first six months of last year. Its second-quarter loss per share was 46 cents, compared with 10 cent in 2008. It intends paying shareholders a dividend of three cents a share for the second quarter, unchanged on last year.

The figures show the company cut operating expenses to $18 million in the first half, from $27.6 million. General and administrative expenses were down $1.5 million at $5.3 million. Cryptologic has switched focus to licensing its casino games to other operators from simply developing them for its own platforms.

During the first half of the year, the company signed deals with operators such as Paddy Power, Betfair, Victor Chandler and Sportingbet.com.

In July, it signed up Cheltenham Gold Cup sponsor Totesport, Britain’s state-owned and fourth-largest bookmaker. The company returned to profitability during the month of June, and expects to generate cash and a surplus through the second half of the year as new customers roll out its branded games.

Chief executive and president Brian Hadfield said the second quarter marked a turning point for the company, with significant growth in its core businesses.

Cryptologic’s headquarters is in Dublin, where it employs 24 people. It has a presence in Canada, Malta and Russia. The company is listed on the Toronto, Nasdaq and London stock exchanges.