Entertainment Laboratories is eyeing third quarter growth after the firm’s expansion projects were brought to a relative standstill during the year’s second quarter due to COVID-19.
With disruptions endured in Latvia, where parliament suspended all gaming licenses in the country from April 8 to June 10, and Lithuania, where retail operations ceased for much of Q2, Enlabs has reported a series of decreases in its latest financial report.
Total group-wide revenue during the quarter fell 35 per cent to €6.1m (2019: €9.4m), with gaming revenues dropping 37 per cent to €5.4m (2019: €8.6m). Geographic distribution of gaming revenues is 85 per cent from Baltic markets, Estonia, Latvia, and Lithuania, and 15 per cent from emerging markets.
Net profit for the quarter decreased 76.3 per cent from €2.02m to €480,000, and EBITDA plummeted 81.8 per cent to finish up at €457,000 (2019: €2.51m).
For the six month period to June 30, 2020, revenues totalled €16.6m, a 10 per cent decrease from €18.4m, net profit dropped 39.3 per cent from €4.33m to €2.64m and EBITDA closed at €3.24m, down 38.8 per cent from €5.3m.
George Ustinov, CEO and president at Enlabs, said of return to action: “Enlabs’ customers have welcomed our return in Latvia with several daily activity records proving that regulated local operators can always better cater for customer demands.
“This also showed more broadly than ever that balanced regulation aligns the interests of players, operators and government authorities. The regulatory landscape has stabilized in all three Baltic countries with their COVID-19 related restrictions lifted.
“All Enlabs brands and retail betting shops are now fully operational. The Enlabs team stayed strong together. We avoided job cuts and calmly switched to remote work. Since June, all Enlabs offices are open with safety measures in place.”
During the two months of closures in Latvia, Enlabs worked upon a second brand launch, with Laimz.lv, a mobile-first gaming product offering online casino and bingo, debuting one day after the state of emergency was ended.
Furthermore, the company, which acquired a 29.9 per cent stake in Global Gaming to become the largest single shareholder, has also detailed several other expansion strategies that are either in works or have been carried out.
As well as joining Playtech’s iPoker network and introducing esports betting with EveryMatrix, following the culmination of Q2 Enlabs’ flagship Optibet brand has soft launched in Peru and Chile with localised content, services and offers as well as relevant payment solutions.
A renewed focus placed upon the Swedish market, with significant product improvement prioritised for the remainder of the year, has pushed back an online launch in Belarus to 2021, with the firm also eyeing Ukraine after a new law was passed regulating online gaming.
“Enlabs has experience and knowledge in this market and believes it can implement a compelling offer for local customers,” Ustinov added on the firm’s Ukrainian ambitions.
“Regulation creates financial barriers for entry, however, it still enables competitive and balanced regulated market development. To an extent, the Ukrainian regulation resembles a mix of what Enlabs currently faces in our core markets, but the final version is still under discussion.
“Enlabs will enter the Ukrainian market as soon as legally possible. According to unofficial market statistics, an online gaming market may be worth around €300m and growing in a country with a population of €42.2m.
To close, Ustinov added: “Considering the market recovery in June, the return of sports activity, and our packed road-map going forward, we are looking toward growth in Q3.
“In July Enlabs’ consolidated gaming revenue was up 11 per cent compared to the same period a year ago. Business is back on a strong momentum.”
