Chinese online poker and board game company Ourgame International Holdings Ltd has issued a profit warning for the six months to 30 June 2018 ahead of expanded losses over the same period in 2017.
In a filing to the Hong Kong Stock Exchange, Ourgame said the group will record a loss that is “significantly higher” than the RMB74 million (US$10.7 million) it lost in 1H17 as a result of increased competition and regulatory headwinds in the Chinese domestic card and board game business.
The company also announced its intention to dispose of certain segments of its online card and board games business, including Ourgame Hall and Poker World, and has entered into agreements to reorganize and dispose of some core components.
As a result, Ourgame has written down all of the carrying values of the assets relating to these businesses as at 30 June 2018, which will result in one-time impairment losses of between approximately RMB350 million and RMB380 million, representing between 19% and 21% of the group’s total assets.
Despite the continued setbacks, Ourgame said that its other business units – namely eSports and poker – have exhibited strong growth in the first half of 2018.
“The group’s eSports subsidiary, Allied eSports, officially opened its global flagship arena at the MGM Luxor Casino and Hotel in March 2018 in Las Vegas and its first major eSports event at the Las Vegas Arena with the leading eSports live-streaming provider in the US resulted in record breaking viewership of 680,000 peak concurrent viewers and more than 2.5 million unique viewers,” Ourgame said. “Allied eSports has attracted major partners and sponsors that are eager to reach the young eSports audience.
“The group’s World Poker Tour business continues to expand into new geographies and its TV programs continue to reach a growing TV audience of more than 140 million households worldwide as of July 2018. Its brand power continues to fuel the growth of its licensing business, with partners including Zynga and its improved operation continuing to reflect positively on its financials.”