Cherry AB revenues up 41% in Q2 2018

Cherry AB has revealed a 41% year-on-year rise in its revenues for the second quarter of 2018, which it attributed to “significant and effective” investments in marketing.

The company reported revenues of SEK753m (£64.4m) during the quarter, while company EBITDA increased by 78% to SEK165m (£14.1m) with an EBITDA margin of 22%.

Its online business ComeOn saw second quarter revenues increase by 38%, rising to SEK600.9m (£51.4m), with a rise in EBITDA of 92% during the period.

Acting president and CEO Gunnar Lind said business during the period was “characterized by a focus on growth, in the short term as well as long term. Investments in marketing were significant and effective.”

Lind added: “Online gaming is expanding and strengthening its position in key markets, while the business area’s new brands are also rapidly building awareness and establishing a good customer base. Game development and online marketing have also acted proactively through increased investment in game development, acquisitions and a clearer presence in Sweden.”

Revenues from Cherry’s affiliate business Game Lounge increased by 74% during the quarter, rising to SEK57.4m (£4.9m).

Game development studio Yggdrasil revenues also rose sharply during the period, rising by 65% year-on-year to SEK66.7m during Q2 2018, while EBITDA for the developer rose to SEK22m, with a margin of 33%.

During the quarter, Cherry completed the acquisition of 44% of shares in the affiliate company, Game Lounge at a cost of €9.8m with Cherry now holding a 95% stake in the business. In addition, Cherry acquired another 7.5% share in Almor Holdings for €2.2m, bringing its stake in the business to 90%.

Cherry’s former CEO, Anders Holmgren was detained by Swedish authorities in May over possible insider trading and was ousted from his position as CEO soon after. Acting CEO Lind said the board has commenced the recruitment process to find Holmgren’s successor.