Betsson posts 9% rise in revenues during "challenging" Q2
Group's profits slide following weak sportsbook margins and negative currency fluctuations
Betsson AB has posted a 9% year-on-year increase in revenues for Q2 2016, but saw profits slide after a disappointing sportsbook performance and unfavourable currency effects.
The Group’s revenues for the three-month period totalled SEK935.4m (?82.5m), up from SEK860.6m Q2 2015, as exchange rate fluctuations had a negative impact on revenue of SEK32.8m (?2.9m).
Sportsbook revenues amounted to SEK223m (?19.7m), an increase of 8% YoY but lower than the SEK292.8m the firm posted the previous quarter. The firm said a low sportsbook margin resulted in lower than expected revenues.
Operating income totalled SEK158.3m (?14m), 26% lower than the SEK213.8m (?18.8m) posted in the same period last year, while operating margin was 17% (25%), affected too by unfavourable exchange rate fluctuations.
Europe-Bet, which Betsson acquired in 2015, provided SEK94.1m (?8.3m) to the Group’s revenue during the quarter and SEK22.9m to operating income (?2m).
Casino revenue increased 11% year-on-year, totalling SEK683.2m (?60.2m) and accounted for 73% of the total revenue in the second quarter.
Ulrik Bengtsson, CEO Betsson AB, said performance during the quarter “did not live up to our expectations”.
“Many factors made the quarter challenging; primarily unfavourable currency effects, lower than average sportsbook margins and lower revenue in certain markets, partly due to regulatory changes.
“Betsson’s subsidiaries operate in a dynamic environment which is highly demanding. They have taken several actions in the past months in order to increase growth and thereby profitability.
Bengtsson added the sportsbook product and functionality had improved “considerably” and the new products and upgraded casino had a positive effect already.
“These actions will have an effect in future quarters, and we have already in the end of the second quarter seen a strong uplift in active customers,” he said.
“The third quarter has started with daily revenue significantly above the average of the second quarter,” he added.