NetEnt has not seen any negative business impact from the COVID-19 pandemic as the firm vows to “secure a good development” in the shorter and longer term amid the current “exceptional situation”.
Issuing an interim report for the January-March period the casino content developer has maintained that Red Tiger, the full integration of which has been initiated to realise further cost synergies, continues to perform above expectations.
With mitigation efforts to minimise the effects of coronavirus ongoing worldwide Therese Hillman, CEO of NetEnt, explained: “It is difficult to predict the effects of the COVID-19 situation on the economy in general and our sector in particular, but we believe that the underlying trend of digitalisation in gaming will continue and offer growth opportunities for NetEnt in the future. So far, the financial performance of our business has not been negatively affected by the outbreak of COVID-19.”
In a bid in bring cost savings of SEK 150m during the second half of 2020 NetEnt has implemented organisational changes, alongside the aforementioned Red Tiger integration, which will reduce its workforce by 120, mainly Stockholm-based, employees.
“This means that we are increasing our estimate of potential synergies from the acquisition to around SEK 250m annually, including revenue synergies,” Hillman noted.
Revenue for the quarter jumped 23.9 per cent to SEK 518m (2019: SEK 418m), supported by a strong finish in March. Growth is said to have been driven performances in the UK and US, with developments in Norway and Sweden again labelled negative.
This follows comments made earlier in the month which saw the company stress that a change in Swedish licensing needs to be introduced, calling on the establishment of a B2B licensing system to create fairer conditions and a higher channelisation rate.
EBITDA during the period climbed 16.8 per cent from SEK 196m to SEK 229m with earnings after tax falling 31.6 per cent from SEK 120m to SEK 82m.
Fresh off the back of 12 new slot releases during the period, Hillman assures that another vertical forms a key component of the entities expansion strategy during 2020.
“Within live casino we continue our efforts to strengthen the product. For instance, we increased the number of tables in our studio on Malta and upgraded the user interface for mobile gaming in the quarter,” she says.
“We have had new record levels in the number of players every month since December and we see increasing interest for the product by operators and players. A strong product pipeline, new regulated market entries and the live casino opportunity for NetEnt – combined with Red Tiger’s expansion – puts us in a good position to continue delivering profitable growth in 2020.”