NetEnt Coming On Strong After Q1 ResultsPublished April 28, 2018 by Lee R
Quarterly results will be affected by a set of very specific new strategic developments at NetEnt.
NetEnt’s Q1 Interim Report for January-March 2018 has effectively reflected a very specific expansion strategy.
NetEnt acting President and CEO Therese Hillman was quick to point out that a new focus on growth was initiated in March through direct cost-cutting actions that will be supported by “regulated markets, more new games and new customers.”
The key totals that will be watched moving forward are the Q1 revenues announced at SEK 430 (393) million and operating profit (EBIT) of SEK 134 (127) million for a margin of 31.2 (32.2)%.
Operating Profit Factors
The operating profit for the quarter includes absorption of SEK 6 million in severance pay for the previous CEO. Once adjusted, this brings the operating profit to 140 (127) MSEK and the operating margin to 32.5 (32.2) %.
Other totals include profit after tax of SEK 146 (115) million and earnings per share of SEK 0.61 (0.48) before and after dilution.
Important events affecting growth in the first quarter include 6 new customer agreements and the launch of 8 new customer casinos.
Launched with operator Caliente in Mexico were five new slot games including the highly publicized Phantom’s Curse, Asgardian Stones and Hotline. Meanwhile, Live Beyond Live launched with Mr Green.
Other developments included a digital marketing service (programmatic) contract signed with Mr Green, and the direct appointment of Therese Hillman as acting CEO, replacing long-time head NetEnt Per Eriksson.
Other cost increase attributions during NetEnt’s Q1 included increases in Live Casino staff and higher depreciation from newly launched products and currency effects.
Among other showings, royalty income at NetEnt grew nine percent during the first quarter, and four percent in Euro year-on-year, with the share of revenues from locally regulated markets at 34 (31) percent for the quarter. This turn-in was bolstered by growth in the Italian market in particular.
North American Campaign
Hillman further revealed the company’s decision to enter North America through application for licensure in Pennsylvania, as well as launching games with the British Columbia Lottery Corporation in British Columbia (Canada) by Q3.
With a new director at the helm and bold expansion strategy, NetEnt is definitely a company to watch for the year’s remaining three business quarters.