PhilWeb eyes smaller gaming firms

MANILA, Philippines - PhilWeb Corp., the first and largest Internet gaming company in the Philippines, is on acquisition mode, as it scouts for opportunities to buy gaming companies here and abroad.

PhilWeb chairman Roberto V. Ongpin said on the sidelines of the company’s annual stockholders meeting yesterday that with about P1 billion in cash in the bank, “we plan to use the amount to pay dividends to our shareholders and accelerate our rate of growth by acquiring smaller gaming companies here and overseas.”

Ongpin explained that they will buy what makes sense for them to buy. “These will be smaller gaming companies, both here and abroad. I’m keen on buying a few smaller gaming companies all over the region. But we are not looking at any particular company right now,” he said.

He also called on the government to seriously consider allowing mobile text lottery in the country. The Philippine Charity Sweepstakes Office (PCSO) was earlier prevented by the courts by way of an injunction from granting operators the license to engage in gaming by way of text messaging.

He said that while there are only 4,000 lottery outlets in the Philippines, as opposed to physical outlets, there are over 70 million mobile phones. “The potential is enormous. It is convenient for bettors. They do not have to line up,” Ongpin pointed out.

Ongpin also said his personal target is for PhilWeb to double this year its 2011 revenue.

PhilWeb president Dennis Valdes reported that the company posted a record P1.165 billion revenue in 2011, a 12 percent growth from the previous year. Net income in 2011 was at P940 million, a 45 percent growth

The number of Pagcor e-Games cafes (PeGS) rose to 227 as of end-2011. To date, the number of cafes has increased to 251.

PhilWeb Asia-Pacific president Michael Thomas Grandinetti revealed that they have existing licenses in Timor Leste (mobile gaming and scratch cards, and soon, e-Games cafes), Cambodia (scratch cards), and in Guam (sweepstakes café), even as the company is working on securing licenses, mostly for scratch cards operations in Laos, Nepal, Palau, Myanmar, Indonesia and Vietnam. “The growth levels in 2012 will be very exciting,” he said.

Ongpin said that the Asia Pacific business “is extremely exciting for us.”

He explained that the demographics in these countries are such that the business can be much larger than that in the Philippines.

For the first quarter of 2012, revenues reached P342.5 million, a 25 percent growth year-on-year, while net income increased 40 percent to P242.5 million. “We had a robust first quarter because of the contribution of our Asia-Pacific operations,” Valdes said.

The January-March 2012 period, according to Valdes, is the best operating income quarter in the history of PhilWeb. “We will accelerate as we go through the year,” he added.

Meanwhile, Valdes said that the company’s core business of providing services to Pagcor in running the latter’s E-Games cafe network had turned in a particularly strong quarter.

“Additionally our Asia Pacific business has started delivering revenues and profits. We started selling scratch cards in Cambodia, in addition to our scratch card business in Timor Leste and our sweepstakes cafe in Guam,” Valdes continued. “Our strategy of pushing into new markets is paying off very quickly.”

“As a result, our operating income for the first quarter is the highest level we have achieved for any quarter in our corporate history. Added to this, we have the strong results from our investments in ISM Corp. and Acentic GmbH, and the total first quarter achieved its spectacular growth of 40 percent,” Valdes said.

Meanwhile, the stockholders of PhilWeb approved an earlier board action to declare a 20 percent stock dividend payable on May 30, 2012 for shareholders on record as of May 4, 2012.

Valdes noted that the stock dividends will be issued to the stockholders just two months after the stockholders received a cash dividend of 10 centavos per share last March 16. “We are happy to be able to give to our stockholders some of the profits earned by the company as a reward for the trust they have reposed in the company over the years” said Valdes.

Last year, PhilWeb paid out two cash dividends, totaling 20 centavos per share, doubling the amount of dividends it paid to its stockholders in 2010.