Interim report January-March 2011
Gaming activity continue to increase
First quarter 2011
– Revenues for the first quarter increased by 8.3 % to SEK 95.2 (87.9) million
– Operating profit amounted to SEK 26.3 (35.7) million
– Operating margin was 27.6 (40.7) %
– Profit after tax amounted to SEK 22.9 (31.0) million
– Earnings per share amounted to SEK 0.58 (0.78) before and after dilution
– One new license agreement was signed, and two new customers’ casinos were
launched
Important events in the first quarte
Revenue growth for the first quarter was 21.3 percent in local currency
compared to the first quarter 2010. The strengthened Swedish currency has held
back revenue growth in SEK.
The number of game transactions amounted to 1.9 billion in the first quarter,
an increase of 6 percent compared to the previous quarter and 32 percent
compared to the same period in 2010.
During 2010 Net Entertainment initiated strategic investments across the entire
business. These investments are necessary to strengthen delivery capacity as
the company grows, market matures, new customers are added and customers become
larger. In addition, the reregulation of the online market creates extensive
requirements that must be faced but at the same time creating large business
opportunities. During the fourth quarter 2010 development of games and system
solutions for mobile terminals was initiated. This market is estimated to show
rapid growth and is an important step in Net Entertainment’s expansion
strategy.
Comments from Johan Öhman, President and CEO
The revenue growth during the first quarter amounted to 8 percent compared to
the same period one year ago. Cleared of currency effects revenues grew by 21
percent. Excluding France, which in June 2010 introduced regulation excluding
casino games thereby affecting some of our licensees negatively, revenues grew
approximately 20 percent measured in SEK. The gaming activity measured as
number of game rounds increased by 32 percent which is an indicator for the
long term development of the industry and our company.
The launch date for online casino in Italy remains unclear and may be further
delayed. It is likely that the launch is pushed into the second half of 2011.
As there is no clear information from the Italian gaming authority (AAMS) we
can today only speculate regarding launch dates. We remain positive about the
expected business outcome from the Italian market. The activities related to
integration and certification has progressed well and is nearing completion.
Our efforts to phase out Swedish consultants and replace them with employees
has been successful resulting in a positive net effect for the company. The
strategic initiatives are progressing well although we as a result of the
further delays in Italy have decided to lower the organizational growth pace
going forward. However, despite this our profitability will be affected until
such time that revenues are generated from Italy.
During the months to come we will release the platinum games Robin Hood and
Frankenstein (our first branded game). We believe both games will be well
received among players generating a positive impact on our royalty going
forward. Additional platinum games are in various stages of development.
We are working on a number of interesting sales opportunities that we hope will
materialize over the months to come. Given a successful outcome this will
further solidify Net Entertainment’s position in the market as a leading
supplier.
We have a positive long term outlook but short term we will see continued
effects of the investments made in our company which includes regulatory
adaptations for Italy.
For additional information please contact;
Johan Öhman, CEO Net Entertainment; Phone +46 8 57 85 45 00
johan.ohman@netent.com
About Net Entertainment
Net Entertainment is a premium supplier of digitally distributed gaming systems
used by some of the world’s most successful online gaming operators. The Net
Entertainment casino is a complete gaming solution comprising both a complete
management platform and a full suite of high quality games. Operators are
provided a customized casino that is easily integrated ensuring short time to
market and a cost efficient operation. Net Entertainment is listed on Nasdaq
OMX Stockholm (NET-B). More information about Net Entertainment is available at
www.netent.com.