CCP Games Half Year Results - summary

CCP Games has released its Financials for the 6 months to 30 June 2014.

I have included a Page on this blog which has the CCP financials for the last five half year periods (which is as much CCP has told us).  The source is from the CCP Games website.

First thing to note is that the revenues are now almost entirely Eve Online.

Second thing to note is that the numbers are distorted by the termination of World of Darkness - and it is not so easy to strip all these factors out.

How you read these results really depends on if you believe Eve Online is seasonal or note.  I.e. is there a reason by the six months to June could not be compared to the six months to December.  Personally, i suspect not.

In Summary:

• Revenues of Eve Online (including China) were $35.5m compared to $37.8m in the 6 months to December 2013 and $35.7m in the 6 months to June 2013
• In other words, it looks like Eve Online went backwards in the six months to June 2014 (and the euro was stronger so would have benefited CCP)
• Slight growth in North American revenues, if i strip out the benefit of a stronger euro then Europe was most likely flat, Asia (i.e. China) went backwards but i believe the agreement with the Chinese partner was changed in favour of the partner and sales to the southern hemisphere fell about 10%
• The cost of writing off World of Darkness was $24.0m, compared to the cost of writing off Dust of $21.5m.
• Other one-off factors include closing the San Francisco office and two company directors leaving (Joe Gallo [finance director] and David Reid [marketing director])
• I don't know the other exceptional costs (costs of laying off staff etc)
• That said, operating profits before the write-off costs were a $4.2m loss, compared to a $7.4m loss in the 6 months to December 2013 and a $0.5m loss in the 6 months to June 2013
• Net debt (all borrowings less all cash) was $18.5m at June 2014 compared to $16.5m in December 2013 and $13.8m in June 2013
• Net debt to ebitda (one of the covenants) rose to 1.2x (the covenant requires it to be less than 1.5x) compared to 1.0x at December 2013 and 0.9x at June 2013

I will write more posts on these results in the future but for me the key observation was that Eve Online seems to have gone backwards in the 6 months to June 2014.  That surprised me.  I don't have the data to see if the actual number of players has gone down but i suspect this may be the case.  The other explanation would be if the subscription prices went down.

One item backing this up is that subscriptions paid in advance at June 2014 were $4.3m compared to $4.4m at December 2013 - so more evidence of a slight decline.

Until i am able to get more information on what other costs were one-off in nature in the 6 months to June 2014 i will likely struggle to get a feel as to how 2014 will turn out.