Net Entertainment growth continues

The Swedish online gambling group Net Entertainment’s interim report released Thursday shows that double digit growth in the second quarter has continued despite the traditionally low season that normally starts in May.

CEO Per Eriksson says: “We have a solid sales pipeline in Great Britain as well as in other parts of Europe and overall our position is strong on the market and I look forward to the second half of 2013.”

Highlights of the quarterly report include:

* Second quarter 2013 revenues increased by 12.6 percent to SEK 148.7 (132.0) million
* Operating profit amounted to SEK 38.7 (39.6) million
* Operating margin was 26 (30) percent
* Profit after tax amounted to SEK 38.8 (36.7) million
* Earnings per share amounted to SEK 0.98 (0.93) before and after dilution
* Six licence agreements with new customers were signed, two new customers’ casinos were launched

The company’s half yearly situation for the first six months 2013 is:

* Revenues for the first six months increased by 14.6 percent to SEK 297.5 (259.5) million
* Operating profit amounted to SEK 79.7 (79.7) million
* Operating margin was 26.8 (30.7) percent
* Profit after tax amounted to SEK 71.7 (71.4) million
* Earnings per share amounted to SEK 1.81 (1.80) before and after dilution
* Twelve new license agreements were signed and five new customers’ online casinos were launched

NetEnt flagged the following important events in Q2-2013:

* Agreement signed with Lottomatica, one of the largest operators in Italy
* Three agreements were signed with existing customers for delivery of Live Casino. Four customers launched Live Casino in the second quarter
* Four agreements were signed with existing customers for delivery of mobile games. Twelve customers launched mobile games in the second quarter

Per Eriksson commented:

“The second quarter showed a solid development for Net Entertainment. We launched several new games and despite the seasonal effect that normally occurs during the months May-August the game volumes remained at a relatively stable level compared to the previous quarter.

“Compared to last year game transactions increased by 34 percent. Revenue growth was 13 percent (17 percent in Euros) during the second quarter compared to the same period in the previous year and the operating margin amounted to 26 percent.

“We see a continued interest for Net Entertainment’s products and services. Six new customer agreements were signed in the second quarter, of which one Tier-1 customer, Lottomatica, which is one of the market leaders in Italy. The agreement will further strengthen our position in Italy.

“Mobile games continue to show good growth and during the quarter four new agreements were signed. To date 34 customers have launched mobile games. The launch of the Live Casino product is moving forward, albeit at a somewhat slower pace than expected, primarily due to certain operators that are waiting to fully market the product until blackjack is live. We signed three new agreements for Live Casino during the quarter with a total of 19 agreements signed to date, of which eight are launched.”

Eriksson made particular mention of a new and unique game he revealed NetEnt is in the final phase of developing within its Live Casino product, titled Common Draw Blackjack, saying:

“In traditional blackjack each table can have a maximum of seven people playing simultaneously which has made the operators experience a shortage in blackjack tables within live casino. In addition, traditional blackjack is not scalable.

“Common Draw Blackjack is a unique solution developed by Net Entertainment where the number of players is unlimited while still receiving the same good experience as for traditional blackjack. The launch of Common Draw Blackjack is expected to take place during the third quarter followed by standard blackjack which also is an important part in Net Entertainment’s Live Casino portfolio.”

Eriksson said that Net Entertainment is following legalisation developments in the US and is currently investigating potential American partnerships.