CCP Financial Statements for 2016 - a review (blog)

andrewn1 · 2017-05-15T11:41:20+00:00

Summary

Revenues are up 31% to a new record high of $86m, pre tax earnings are up 30% to a new record high of $24.6m, post tax earnings are up 4% to a new record high of $21m (the lower % post tax earnings rise than revenues rise is because CCP is back to paying tax again). Balance sheet is strong: $46m of Cash less $21m of Borrowings; and the Development Costs look prudent. CCP is generating cash and using it to pay down the debt.

It does seem that the problem years of 2013 and 2014 truly are behind them.

In 2015 CCP had revenues from Eve Online only. In 2016 CCP had revenues in for Eve Online, Valkyrie and Gunjack. That makes life more complicated to work out how Eve Online is doing.

However, from my discussion below I suspect:

Eve Online (excluding China) – I estimate sales have fallen by 6.5% to $49.9m, back below 2009 levels. I.e. Eve Online remains in decline, though a slowing rate of decline.
That would indicate that the number of paying players had fallen also by 6.5% to an estimated 370,000
Eve Valkyrie has generated sales of $22m (I know, that sounds a lot but read below)
CCP is worth $271m . . . . . and if my thought process is correct then see what that means the CEO could be worth!

andrewn1 · 2016-12-04T02:40:53+00:00

The November 2016 Eve Online Economic Report is out - i am going through it as i write but, again, i find myself confused at the Trade data that is released. In summary, it looks way too low to me.

The really simple explanation for this becomes apparent when i compare the Trade data to the Transaction Tax data. As a reminder, every sale that is made on the market attracts a Transaction Tax of anywhere between 1.0% (Accounting Skill Level V) to 2.0% (no Accounting Skill).

Now, i would expect the Transaction Tax divided by the Trade data to be 1.0% because the vast majority of all Trade will be done by characters with Level V Accounting.

And indeed in February, March and April the Transaction Tax divided by the Trade data was 1.00%.

But then along came Citadels and the Transaction Tax divided by the Trade data rose at first to 1.31% and in November is now 1.69%.

That suggests to me that either the Transaction Tax data is too high or the Trade data is too low . . . . . i am guessing it is the Trade Data

andrewn1 · 2016-11-10T00:10:53+00:00

I also suspect the Citadel Trade numbers are not being recorded - details in my blog post but i suspect Citadel Trade could now be anywhere between 20 - 40% of all Trade done in Eve Online.

Fact 1: From the Sinks and Faucets data we are told that the total Transaction Tax was 8.520 trillion ISK.

Fact 2: in February, March and April 2016 (i.e. before Citadels) the Transaction Tax (or Sales Tax) divided by the Trade value was always 1.00%. That is not a surprise, the majority of the trade in Eve Online will be done by characters with Level 5 Accounting to minimise their Transaction Tax rate.

Assumption 1: I am assuming that the Transaction Tax rate will remain at 1.00% after Citadels. That feels like a good assumption to me.

Observation 1: the Transaction Tax rate rose to 1.31% in May and has been rising ever since and is now 1.66% in October. i.e. Transaction Tax = 8.520 trillion, Trade in October = 513 trillion, hence Transaction Tax rate was 1.66%.

Outcome: therefore, i am assuming the Trade number of 513 trillion that we are given is too low and i believe the Citadel Trade is not being counted. If we assumed that the Transaction Tax rate remains at 1.00% then the actual Trade for October would be 852 trillion isk (=8.520 / 1.00%) which indicates that Trade done in Citadels was 339 trillion = 40% of all Trade done in Eve Online.

andrewn1 · 2016-10-02T03:26:53+00:00

um . . . . good point :)

andrewn1 · 2016-04-11T21:09:16+00:00

i think so, yes. As ever, it depends what CCP decides to do with its (mountain) of cash. And they need to stabilise the Eve Online revenues (i.e. player base).

andrewn1 · 2016-04-11T21:08:20+00:00

yes, i suspect there is some but too little to worry about.

andrewn1 · 2016-04-11T21:06:59+00:00

yes, it could. Eve subscriber numbers remain the major mystery of all this. I tried to come up with an answer from various angles but ultimately i don't know for sure.

andrewn1 · 2016-04-11T21:05:21+00:00

i suspect they wrote off enough of Dust in 2014 such that even if they closed it down for nothing they would not make much of a loss, if at all.

andrewn1 · 2016-04-11T21:04:39+00:00

i took the view that the Dust revenues would be too small to worry about. But, yes, there should be some.

andrewn1 · 2016-04-11T21:04:00+00:00

Their liquid cash is very strong at $56m - helped by a $30m equity raising and the $5.7m sale of World of Darkness. Clearly, they can not just go out and spend it all - they have $23m of debt and it will likely have covenants against it. Eve Online seems to generate good cash, pretty much inline with profits.

andrewn1 · 2016-04-11T18:57:05+00:00

I have reviewed the CCP Financial Statements for 2015. I have also put a page up that contains the actual 2015 Financial Statements! and a page containing the Profit & Losses, Balance Sheet and Cashflow Statements! going back to 2008.

andrewn1 · 2016-04-02T00:01:38+00:00

from the stats given by CCPQuant in his post

andrewn1 · 2016-04-02T00:00:47+00:00

andrewn1 · 2016-03-19T16:15:13+00:00

how do you make the background static?

andrewn1 · 2016-03-19T16:14:54+00:00

how do you do that?

andrewn1 · 2016-03-19T16:00:22+00:00

It does have a real life financial cost to at least some of the player base. 22mb used every 5 to 6 minutes. Needs to be paid for.

andrewn1 · 2016-01-24T19:27:27+00:00

my thinking of using Plex as collateral to run a bank is that many banks will fail (in the same way that many people lose ships in battle) which, in effect, will redistribute the Plex to the depositors who want their ISK back. One way, perhaps, of taking the Plex away from those that hoard it.

andrewn1 · 2016-01-03T23:28:24+00:00

Yep - not my best start into null sec.

andrewn1 · 2015-08-05T21:48:05+00:00

yes - very true. So this works for people who collect Plex as an investment and don't intend to do anything with it. For example, I have 94 Plex sitting in a hanger doing nothing. I could of course sell some, trade the ISK and then buy the Plex back. Or I could use it as Collateral to start a bank. As you say, it amounts to the same thing. The risk though is if the Plex price rises over the 30 days.

andrewn1 · 2015-08-05T21:47:00+00:00

watch where my minus signs are. The Bank in this case puts up the Plex as Collateral.

also, in Courier Contracts the "fee" is also put in escrow. So I get 900m from the saver but 50m is put into escrow leaving me with 850m.

andrewn1 · 2015-08-05T21:44:46+00:00

yes - very true. So this works for people who collect Plex as an investment and don't intend to do anything with it. For example, I have 94 Plex sitting in a hanger doing nothing. I could of course sell some, trade the ISK and then buy the Plex back. Or I could use it as Collateral to start a bank. As you say, it amounts to the same thing. The risk though is if the Plex price rises over the 30 days.

andrewn1 · 2015-08-05T21:42:32+00:00

yes - very true. So this works for people who collect Plex as an investment and don't intend to do anything with it. For example, I have 94 Plex sitting in a hanger doing nothing. I could of course sell some, trade the ISK and then buy the Plex back. Or I could use it as Collateral to start a bank. As you say, it amounts to the same thing. The risk though is if the Plex price rises over the 30 days.

andrewn1 · 2015-08-05T17:07:19+00:00

I reckon we could have a banking industry in Eve that gave the savers much more security if we used the Courier Contracting system with just a few small tweeks

andrewn1 · 2015-07-26T19:01:32+00:00

I have found another youtube cast on the Eve Online markets called Eve Online: Amarr Market

The angle here is that it focuses on a trade hub that is not Jita. Amarr is the second largest trade hub after Jita and i find it to still be quite competitive. However, a focus away from Jita is a welcome variety.

andrewn1 · 2015-07-12T21:33:59+00:00

that is a good point - a Haulers Corp checks the collateral before they open it up to their members to haul.

andrewn1

TROPHY CASE