Interim report for the period 1 January – 30 June 2017

Strong momentum drives vigorous growth

Second quarter

• Revenue amounted to SEK 42,675 (4,812) thousand, an increase of 787%.
• Operating profit before depreciation (EBITDA) was SEK 25,943 (-498) thousand.
• Operating profit (EBIT) was SEK 25,688 (-639) thousand.

First six months

• Revenue amounted to SEK 83,639 (8,860) thousand, an increase of 826%.
• Operating profit before depreciation (EBITDA) was SEK 50,985 (-1,082) thousand.
• Operating profit (EBIT) was SEK 50,485 (-1,360) thousand.

Outlook

For the full year 2017, the Board has prepared a forecast for Net Gaming, with EBITDA amounting to circa SEK 110 million. The forecast does not include any additional acquisitions.

CEO’s comments

If the first quarter started the year in the best possible way, the second quarter continued in the same way, with continuing strong growth. The second quarter is normally the weakest in the year due to seasonal variations in the gaming industry. Net Gaming’s revenue increased by SEK 37.9 million, corresponding to growth of 787%, while EBITDA increased by SEK 26.4 million compared with the same period the previous year. 

The development within our business segment lead generation in 2017 has been stronger than expected, with revenue for the second quarter showing organic growth of 25% and adjusted EBITDA increasing by as much as 45% compared with the same period the previous year. Revenue for the first six months of 2017 increased by 17%, while EBITDA increased by 29% compared with the same period the previous year. This should be seen in relation to the fact that Highlight Media showed revenue growth of about 12% for the full year 2016 compared with 2015 and adjusted EBITDA growth of about 28% compared with the previous year. It is of course pleasing to be able to say that Highlight Media also continues to perform well under Net Gaming’s control and I see good opportunities for continuing growth. 

I have received a number of questions about our reported tax expense. Normally Net Gaming is most likely to meet the basic requirements for tax reduction in Malta, which means that the effective tax rate in the Group will be around 5%. Because we also have unutilized tax loss carry-forwards, our effective tax will be 0% right now. In line with accounting principles, the loss carry-forwards are recognized as an expense directly in the income statement. This, despite the fact that no current tax expense arises and no tax has to be paid.

The growth strategy we have developed also includes acquisitions, which we review continuously. There are a few interesting acquisition candidates, but this is also dependent on the required funding being in place, and Net Gaming’s Board is therefore looking at different options for optimising the capital structure. 

Marcus Teilman, President and CEO