Global Gaming bounces back with return to profitability
Swedish operator back in black after difficult year as Q2 2020 profit reaches SEK1.1m
Global Gaming has returned to profitability in Q2 2020 after a disastrous 15 months following the loss of its Swedish gambling licence.
The Swedish firm recorded operating profit of SEK1.1m (£97,000) for the quarter, up from SEK-11.1m in 2019 by reacting “quickly and forcefully in a very difficult situation” after the Swedish Gambling Authority (SGA) revoked its operating licence for regulatory violations last June.
Global Gaming lost two appeals to recover its Swedish licence, which reportedly cost the operator 75% of revenue overnight after its flagship Ninja Casino brand was taken offline.
The operator said it had constantly adapted operations to the extent that “no part of the organisation remained unchanged”.
The tech platform was overhauled, management was restructured, the company was downsized by two thirds and the cost base was significantly reduced.
Revenue for the quarter amounted to SEK71.8m (£6.3m), down from SEK132.2m in 2019 as H1 revenue dropped 56% to SEK129.7m (£11.4m).
Half year operating profit was SEK0.8m (£70,000) – a stark contrast to the SEK-54.5m loss recorded in H1 2019.
Global Gaming CEO Tobias Fagerlund
“The last 15 months have been the most difficult and challenging period I have experienced in my professional life,” said CEO Tobias Fagerlund.
“When I took over as CEO of Global Gaming, we were badly hurt and had just recalled our already decided proposal for share dividend to the owners.
“When we also lost our Swedish licence in June last year, and with it 75% of our income, many thought our days were numbered. But now, we are back in profit again,” he added.
According to Global Gaming, average income per day for July came in 12% higher than the daily average during the first six months of 2020.
The company is primed to launch its first sports betting product later this month, while several new market launches are also scheduled for Q3 2020.
Nordic-facing analyst firm Redeye said: “The Covid-19 crisis seems to have boosted the revenues more than expected, but operational expansion has made a positive impact as well.
“The bottom line came in positive despite significant one-offs due to restructuring and exchange losses.”
Global Gaming received a significant financial boost in June when fellow Swedish operator Enlabs became the majority shareholder in the firm via a £7.7m deal.
Redeye added: “We believe that it is likely that Enlabs will try to obtain the remaining 70% of the shares.
“However, if that would not be possible at a reasonable price, the company will likely try to set up a lease agreement for the right to operate the Ninja Casino brand in Sweden.”