Net Gaming's Q1 results hit by European concerns
Published 24th May 2019
Net Gaming has seen its share price tumble after a disappointing set of results for Q1.
The Stockholm-listed gaming industry marketing operator saw revenue decline by 6.2% to €4.1m in the three months to March 31.
EBITDA fell 16.1% to €2.6m, although the earnings figure would have been higher at €2.8m but for a one-time effect related to the divestment of the Battle of Malta poker brand. Profit after tax declined 9.3% to €1.9m.
Total NDC growth declined by 15%, with its largest vertical, Casino, down by 14%.
On a positive note, North American revenue grew by 42% and the region now accounts for 26% of its total revenue.
However, Net Gaming said it was affected by uncertainty over the future of gambling in some European markets, such as the Netherlands and Italy, as well as the re-regulation in its native Sweden. CEO Marcus Teilman said “ongoing restructuring of the gaming market in Europe will continue to have an adverse effect on our revenue in the period ahead”.
Net Gaming said that in order to cope with the political regulatory effects in Europe, the company will increase its focus on acquisitions with the aim of creating an increased geographical distribution of revenue.
Teilman said: “The political regulatory effects in Europe and the transition to an increased revshare proportion are two main factors that explain why we have not shown better revenue growth during the first quarter.
“We face a period ahead in which these two factors will continue to have a negative impact on our revenue.
“Positive factors that stand out during the first quarter are revenue growth of 42% for North America and the continuation of re-regulation in the US.”
Net Gaming’s share price fell to a year-low SEK 4.23 earlier today (Friday), down on the SEK 7.18 of a week ago and the year-to-date-high of SEK 10.10 in January.
Net Gaming has a presence in 30 countries and offers 130 sites. It has 90 employees in six countries, with its head office in Malta.