|Monday 16th July 2012
Online gambling software developer Net Entertainment AB has released an interim report on its financial performance over the first six months of 2012 showing that earned experienced all-time high revenues.
Stockholm-based Net Entertainment revealed that it brought in revenues of SEK259.5 million ($36.91 million) from January 1 to the end of June, which was a rise of some 33 percent year-on-year, while its operating profit increased almost 49 percent when compared with the same period in 2011 to SEK79.7 million ($11.33 million).
Net Entertainment signed ten new licence agreements and launched eight fresh customer casinos during the first six months of 2012 and announced that its operating margin for the period rose 3.3 percent year-on-year to 30.7 percent while its profit after tax improved by 48.7 percent when compared to the initial six months of last year to SEK71.4 million ($10.15 million).
“Net Entertainment continued to show solid development during the second quarter,” said Per Eriksson, President and Chief Executive Officer for Net Entertainment.
“Revenues increased by 32.2 percent and operating profit increased by 46 percent compared to the same period last year. Increased volumes with existing customers was the main reason for the revenue increase in combination with set-up fees from five new customer agreements, mobile games and agreements with existing customers on regulated markets.
“In order to give the company additional prerequisites to act swift and effectively on a dynamic market, a reorganisation was carried out during the second quarter. The purpose of the changes were primarily to make the decision-making process more effective through a flatter organisational hierarchy and meant that certain management positions were eliminated, such as Chief Technology Officer. The reorganisation resulted in non-recurring costs of SEK2.5 million ($355,665) in the second quarter.”
Second quarter revenues swelled by 32.2 percent year-on-year to SEK132 million ($18.77 million) while operating profit for the period amounted to SEK39.6 million ($5.63 million), which was an over 45 percent improvement over the same three-month cycle last year.
The firm signed five new license agreements and premiered four customer casinos over the course of the second quarter with the three-month period’s operating margin of 30 percent 2.7 percent better than for the same stage last year.
All of this saw Net Entertainment bring in a profit after tax for the second quarter of SEK36.7 million ($5.21 million), which was a 46.2 percent improvement year-on-year.
“Several strategic projects are currently ongoing at Net Entertainment such as Live Casino, entry on the UK market and establishment in regulated markets,” said Eriksson
“These projects have not yet started to generate any new revenues for the company or have not yet reached their full potential, such as in Italy, but are expected to generate significant value for Net Entertainment in the future.
“As these projects are completed, the investments will in certain cases decrease while other projects will require further development to maintain competitiveness. In addition, Net Entertainment will continue to invest as new opportunities arise and we believe that the investments will develop approximately in-line with current levels with the exception of seasonal effects, at least throughout 2012.
“As the company grows and various authorities impose new requirements on the company’s products and operations in conjunction with regulation the need to further develop Net Entertainment’s processes, systems and organisations remains and we do not currently see a decrease in the need to recruit personnel to the company in general. In addition, we have initiated recruitment of studio personnel for Live Casino where a number of personnel will commence their employment during the third and fourth quarter.”
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