Covid-19 Shutdowns Have Company Repeat Negative Results from Q1 2020

Delta lost 1.06 per cent of its market value when its stock fell down to ₹ 186.30 after the company published its last corporate report. India’s single listed live, electronic and online casino operator announced a consolidated net loss for Q1 FY21 of ₹ 28.93 crore (₹ 35.43 crore loss before taxes), similar to figures from FY20’s Q1, when a consolidated net loss of ₹ 28.24 was recorded (pre-tax loss of ₹ 34.78).

The first quarter of FY20 was the first time when all the company’s businesses, with the exception of online activities, were non-operational due to the global pandemic. Delta Corp’s consolidated net revenue then slumped down with 74.08 per cent to ₹ 48.34 crore as compared to Q1 FY19’s ₹ 186.51 crore. The first part of the 2019 Financial Year had also seen profit before taxes of ₹ 63.95 crore and tax expenses of ₹ 21.65 crore, against Q1 FY20’s tax write back to the amount of ₹ 6.11 crore.

Move from 2016 Proves Strategic Win

Back in 2016, Delta Corp Ltd acquired the owner of the poker site Adda52.com - Gauss Network Pvt Ltd in a transaction combining both cash and equity instruments. Delta’s focus behind the deal was to consolidate the company’s leadership position by enlarging its overall footprint and expanding its business horizon.

Nevertheless, the management’s expectations were also that the deal will provide financial strength among other benefits such as business and growth synergies, together with greater customer base and market penetration.

The corporate management could not have been more right. No one could have predicted the sheer scale of the Covid-19 lockdowns, but they made the gaming world shift largely to casino apps and online sites. If Delta had remained solely in the offline brick-and-mortar casino and hospitality business, matters for the company now would have been much different.

Second Wave Did Spare Some Revenue

Despite recording almost identical loss figures for Q1s in FY20 and FY21, Delta’s net sales marked a raise of 57 per cent to ₹ 75.87 crore for the same quarters. While the casino gaming division had recorded no revenue in FY20’s first quarter, now the segment enjoyed sales worth ₹ 43.28 crore, still marking a drop of 80.45 per cent compared to FY20’s Q4.

Delta’s hospitality division showed a similar dynamic when comparing the first parts of the two pandemic-struck financial years. The corporation’s hotels accounted for just ₹ 0.06 of sales in Q1 FY20, and now the division attracted a net revenue of ₹ 9.82 crore.

The online skill gaming division marks the only exception as it recorded a drop of 24.1 per cent from ₹ 57.01 crore in Q1 FY20 to ₹ 43.28 crore in Q1 FY21.

Fiscal Year of 2020 Saw Delta Bounce Back before Second Wave Hit the Nation

The casino and hotel operator almost doubled the FY20 Q1 consolidated net loss in the fiscal year’s Q2 announcing a negative profit of ₹ 54.91 against a net profit of ₹ 59.04 crore in Q2 FY19. Net revenues for Q2 2020 declined with 80.9 per cent to ₹ 38.37 compared to previous financial year’s Q2.

The third quarter of FY20 saw the first positive consolidated profit/loss figure of just ₹ 1.25 crore. The company’s total income rose with 177.45 per cent from ₹ 46.47 crore to ₹ 128.93 crore on a QoQ (Quarter on Quarter) basis.
In December 2020 Delta Corp’s stock rose with 3.16 per cent to ₹ 161.75 when the company obtained green light in principle from the Goa State Investment Promotion and Facilitation Board to develop an integrated resort complex featuring hotels, a retail area, a convention center, an electronic casino facility, a multiplex cinema, a water park area and other facilities at Goa’s city of Pernem.

The fiscal year’s final quarter allowed Delta to announce a consolidated net profit of ₹ 57.77 crore after realizing net sales to the amount of ₹ 211.34, recording a QoQ growth of 63.9 per cent.

Delta Corp, along with its subsidiaries, owns and operates three of the six in total offshore casino licenses in Goa, together with one land-based casino in Goa and one in Sikkim. Thus, the company offers a total of 1,800 gaming positions in both states. Delta also is the owner of a five-star hotel with 176 rooms in the Union territory of Daman and is waiting for a casino license there. In February 2020, the company commenced an international casino in Nepal.