Net Entertainment posts Q4-2013 and full year report

Swedish online gambling software provider Net Entertainment has posted its Q4-2013 and FY 2013 report, claiming that investments are now bearing fruit, and that revenues reached record levels.

The company reports the following highlights:

* Strongest fourth quarter yet as y-o-y revenues increased 24.5 percent to SEK 180.1 (144.7) million

* Operating margin at 31 percent (25.7).

* New record for number of game transactions, which increased by 31 percent in the fourth quarter, and by 32 percent for the year to 16.2 billion.

* Operating profit of SEK 55.6 (37.2) million

* Profit after tax at SEK 56.1 (34.0) million

* Ten licence agreements with new customers were signed, six new customers’ casinos were launched

Important events in the fourth quarter included:

* Licence agreement was signed with bet365 one of the world’s largest gaming operators

* William Hill, Ladbrokes and Lottomatica games were launched

* Eight agreements were signed for delivery of Live Dealer Casino. Five customers launched Live Casino in the quarter

* Two agreements were signed with customers for delivery of mobile games. 13 customers launched mobile games in quarter

Highlights of the Full year 2013 included:

* Revenues for the full year increased by 19.8 percent to SEK 630.7 (526.7) million

* Operating profit reached SEK 179.7 (153.1) million

* Operating margin slightly down at 28.5 (29.1) percent

* Profit after tax amounted to SEK 167.1 (136.1) million

* 27 new licence agreements were signed and 20 new customers’ casinos were launched

* Proposed dividend to investors of SEK 3.00 (2.25) per share

CEO Per Eriksson commented:

“This has been a fantastic year as Net Entertainment started to see the effect from several investments that were carried out during 2012 and revenues reached record levels.

“From a sales perspective Net Entertainment reached yet another record, signing 27 new customer agreements during 2013 of which five with larger operators, so called Tier-1 contracts.

Net Entertainment’s market share was 31 percent (27 percent 2012) [although] the company still has a relatively small presence in terms of revenues in Britain, which is Europe’s largest market. In 2012 Net Entertainment started a large effort to establish the company in this market and today we have signed agreements with several of the largest operators facing the British market

“These operators have not yet reached their full capacity for Net Entertainment and it will take some additional time before they reach their full potential. I have high expectations that these customers will contribute positively to Net Entertainment’s growth in coming years.

“One of the company’s most successful efforts has been casino games through mobile units. Net Entertainment has won several prizes and is known as one of the world’s most prominent suppliers within this segment. In the fourth quarter, 13 customers launched Net Entertainment’s mobile platform and in total, mobile gaming represented 9 percent of the gross gaming yield in Net Entertainment’s casino.

“Mobile games will continue to grow for Net Entertainment and will continue to gain a significant role within the casino industry in the future. In 2014 we will continue to invest in more games and improve the product further to ensure we maintain our market leading position within this segment.

“Live Casino is the latest addition in Net Entertainment’s product portfolio which was launched in the beginning of 2013. The market for Live Casino is growing rapidly and I am convinced that we will see good results from the product as more customers launch and marketing among the operators increase. Net Entertainment has signed agreements with a total of 30 operators of which 14 have launched the product.

“Regulation of online gaming is expected to continue during 2014 and there is a high probability that we will enter more regulated markets in coming years. We follow the developments in the US, discussions are taking place with both operators and suppliers and we are waiting for the right time, the right states and the right conditions before establishing the company on the US market.

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