Investment in online affects Cherry results

Swedish gaming operator Cherry has reported substantial growth in online gaming in its Fourth Quarter 2013 and Full Year 2013 fiscal results.

Ongoing investment in the online business sector, while substantially burdening Cherry’s 2013 results, have provided the company with the platform to develop further, said Emil Sunvission, chief executive officer.

Cherry launched several new brands on its own platform, that support both mobile and PC. It also invested in an organization that will manage support, marketing, payments and marketing to further build brand awareness.

Key highlights in the fourth quarter ending December 31, 2014 include:

• Group turnover increased by 16 percent and amounted to SEK 75.0 million (Q4/2012: SEK 64.8 million).

• EBITDA amounted to SEK -10.7 million (Q4/2012:SEK 1.9 million). EBIT amounted to SEK -11.9 million (Q4/2012: SEK 0.2 million).

• The result after tax amounted to SEK -10.6 million (Q4/2012: SEK 0.4 million) equivalent to SEK -0.80 million (Q4/2012: SEK 0.03 million) per share after dilution.

• Online Gaming grew 31 percent and active customers increased 56 percent. Deposit increased 45 percent and customer intake increased 44 percent.

• Cherry has acquired the online gaming company Web Resorts, which among others operate the brands NordicSlots.com and NorgesSpill.com. The purchase price amounted to Euro 3.3 Million in a cash consideration and an additional performance based purchase price of up to Euro 1.0 million. The business has so far developed slightly above expectations.

• Restaurant Casino reported all time high turnover and EBIT. The turnover increased 4 percent and EBIT 26 percent.

• Yggdrasil Gaming has successfully launched its first online slot.

• Group cash amounted to SEK 68.4 million (Q4/2012: SEK 59.0 million) at the end of the period, excluding additional purchase price of SEK 60.0 from the sales of Automatensites, which will be paid in February.

Key highlights for Full year 2013 included:

• Group turnover increased 15 percent and amounted to SEK 266.3 million (FY2012: SEK 231.5 million).

• EBITDA amounted to SEK -24.0 million (FY2012: SEK 11.8 million). EBIT amounted to SEK -33.9 million (FY2012: SEK 6.1 million).

• The result after tax amounted to SEK -33.7 million (FY2012: SEK 2.1 million) equivalent SEK -2.53 million (FY2012: SEK 0.16 million) per share after dilution.

• Online Gaming grew during 2013 by 32 percent.

• Restaurant Casino increased turnover by 3 percent and EBIT by 2 percent.

Yggdrasil Gaming is reported to be developing on a positive note making a commercial breakthrough with the launch of new games and the signing of game supply agreements with leading Nordic operators.

Cherry is set to launch Klubblo, described as a simple way for sports associations to finance its operations that Cherry develops in co-operation with Swedish sports, represented by Idrottsalliansen, and the Metro Group.

In closing, Sunvission said Cherry expects continued growth and improved earnings in 2014.