NetEnt revenues and profits up in third quarter

The Swedish online gambling software and games provider NetEnt has issued its quarterly and January to September interim reports, again showcasing positive numbers thanks to new products, new markets and new licensees.

The Q3-2016 highlights included:

* Revenues for the third quarter up by 27.7 percent year-on-year to SEK 357.4 (279.8) million;

* Operating profit up 22.9 percent at SEK 129.4 (105.3) million on an operating margin of 36.2 (37.6) percent;

* Profit after tax up 22.2 percent at SEK 119.2 (97.6) million;

* 11 new customer agreements were signed, and 8 new customers’ online casinos were launched;

* Cash flow after investments was up 56 percent at SEK 132 million in the quarter;

* The number of gaming transactions via NetEnt systems was 8.6 billion in the quarter, a y-o-y increase of 31 percent;

* Revenues from mobile increased by 83 percent compared to last year and accounted for 40 percent of revenues in the quarter;

* NetEnt launched games with Rank Group in the UK and several clients in Romania, and rolled out its mobile live casino product for customers for the first time.

For the period January to end September 2016, NetEnt reported:

* Revenues for the first nine months up 30.3 percent year-on-year at SEK 1,054.8 (809.3) million;

* Operating profit up 35.8 percent at SEK 380.0 (279.8) million on a margin of 36.0 (34.6) percent;

* Profit after tax up 37.2 percent at SEK 354.5 (258.3) million;

* 32 new customer agreements were signed and 22 new customers’ online casinos were launched.

Chief executive Per Eriksson reported to shareholders:

“NetEnt’s growth strategy keeps delivering results – we grew in new markets, with new products and with more customers. During the quarter we launched our games in the regulated market in Romania and we rolled out our live casino product for mobile.

“The UK continues to be an important growth driver but the weaker pound had an estimated negative effect of about three percentage points on revenue growth compared to the same quarter last year.

“Our ambition to achieve continued strong sales growth in 2016 remains.”

Eriksson revealed that the company has entered new markets like Romania, and continues its activity in the US, Britain, Spain and other regulated markets.

“We also aim to enter the Canadian market and as a first step we will apply for a license in the province of British Columbia in the fourth quarter,” he said.

Looking ahead, Eriksson said: “We see growing demand for our products and our ambition to achieve continued strong sales growth in 2016 remains. We’ll increase the number of employees, develop our platform, adapt the company to new regulated markets and integrate more and more customers. As previously communicated, we foresee higher costs and larger investments in 2016 than last year – we keep investing to enable continued strong growth going forward.”

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