Earnings upgrade - MindArk's net sales and profit after financial items increase significantly in Q4 2023
MindArk PE AB (publ) ("MindArk" or the "Company") expects to report results for the fourth quarter of 2023 that are higher than current market expectations. The Company estimates that net sales for the fourth quarter of 2023 will amount to approximately 45-47 MSEK. This represents an increase of approximately 55-61 percent compared to the same period last year. Operating profit for Q4 2023 is estimated to amount to approximately 25-27 MSEK, which corresponds to an increase of approximately 140-160 percent compared to the same period last year. Profit after financial items is estimated at approximately 25-27 MSEK, which is an increase of approximately 95-111 percent compared to the same period last year. The company emphasizes that the information is preliminary and that minor deviations may occur in the final report.
For the full year 2023, net sales are expected to amount to approximately 121-123 MSEK, an increase of approximately 30-33 percent compared to the full year 2022. Operating profit is estimated to amount to approximately 19-21 MSEK, which corresponds to a decrease of approximately 1-11 percent compared to the full year 2022. Profit after financial items is estimated to amount to 18-20 MSEK, which is an increase of approximately 50-67 percent compared to the full year 2022.
Reasons for the increase in revenue and profit in Q4 include the following:
- Usage in Entropia Universe has increased by 27.5%.
- Usage is a measure of user activity and also the main driver of MindArk's net sales.
- MindArk has adopted a new policy on how to account for allocation for unconsumed user holdings:
- Previous methodology - Historically, the Company has calculated the allocation for unconsumed user holdings by looking at all previous years since the game's launch 20 years ago and taking into account the years when withdrawals were high. This methodology has given the Company a comprehensive overview of user behavior over time.
- New policy - With the new policy, the company now focuses on the last five years of data to better reflect current user behavior and economic trends. This change aims to provide a more timely and relevant picture of the company's allocation needs for the unconsumed user holdings in Entropia Universe.
- Personnel costs are estimated to have decreased to 10.7 MSEK, a decrease of approximately 5 MSEK compared to Q4 2022 which amounted to 15.7 MSEK.
MindArk expects to publish the Q4 2023 report on February 28, 2024.
This disclosure contains information that Mindark PE AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 08-02-2024 08:00 CET.
Contact person
Henrik Nel Jerkrot
CEO, MindArk PE AB (publ)
Tel: 031 607 260
About MindArk
MindArk PE AB (publ) (“the Company” or “MindArk”) develops and operates Entropia Universe, the world's first MMORPG (Massive Multiplayer Online Role-playing Game) with a “Real-Cash-Economy”, and Entropia Platform. Entropia Universe is a virtual universe consisting of a number of planets with different themes and activities. The software is provided globally and free of charge with the possibility to spend money in the virtual universe for anyone with access to PC and the internet. Entropia Universe consists of a digital economy where resources, materials, land, and buildings are represented as digital assets with an underlying base value. Entropia Platform is the technology platform that powers Entropia Universe. The platform is shared with partners who develop their own unique game content for their planets in Entropia Universe.