Svenska Spel reports stable Q1 2020 revenue amid “new reality” of Covid-19
Swedish operator furloughs 45 of 135 digital business employees during first quarter of 2020
Svenska Spel has reported net revenue of SEK2,055m (£166m) for the first quarter of 2020, remaining relatively stable in line with last year’s revenue figures.
However operating profits for the business rose by 35% year-on-year during Q1 to SEK701m (£56m), up SEK182m, an increase the group credited to lower operating costs and a lower impact of gambling taxation.
Its operating margin during the quarter also rose to 34% in Q1 from a prior 2019 figure of 25%.
Svenska Spel’s digital business increased by 13% during Q1, and now accounts for 41% of the group’s total revenue. However, digital Q1 revenue fell by just under 1% to SEK538m (£43.5m).
The former monopoly operator confirmed that 45 of its total 135 digital business employees had been furloughed due to the pandemic during the period.
Lottery revenue increased by 4% year-on-year during Q1 to SEK1,145m (£92.6m), but revenue from Svenska Spel’s land-based Casino Cosmopol business fell by 11% to SEK372m (£30m) following the closure of all four of its casinos due to Covid-19.
More than 90% of its 900 strong land-based casino staff have been furloughed during the quarter following Sweden’s restrictions on movement and social gatherings.
Addressing the impact of the coronavirus on the business, Svenska Spel CEO Patrik Hofbauer said the business had “quickly been forced to adapt to a new reality” of dealing with changes to its operating model.
“We have therefore implemented measures to ensure a sustainable business, and we have done so with the utmost care about our customers and employees. Our hope is to be able to quickly switch to full operations when the situation turns around,” said Hofbauer.
“The future is more uncertain now than we are used to, but we are addressing it with an offensive focus and with continued concern for our customers,” Hofbauer added.
In addition to the business changes, Svenska Spel has withdrawn payment of its regular dividend to shareholders citing the “difficult to overlook” financial effects of Covid-19.