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Netent Revenues Up

Swedish online gambling software provider reports revenues up at $23.9 million

Swedish online gambling software provider Net Entertainment AB has released its financial results for the first six months of 2010, showing a 27.6 percent year-on-year increase in revenues to $23.9 million.

The company revealed that its operating profit increased by 25 percent year-on-year to $9.2 million off a margin of 38.7 percent compared to 39.5 percent for the first six months of 2009.

Profit after tax in the reporting period amounted to $8.3 million, an increase of $933,200 over the same period last year.

The company signed six new license agreements with firms including Gioco Digitale/Bwin, Interwetten, Intralot and Stan James and launched seven new casinos for its customers.

“Traditionally, the second quarter offers lower growth potential due to seasonal effects, which this year was strengthened by the 2010 FIFA World Cup decreasing player activity for the casino segment during the matches,” said Johan Ohman, President and Chief Executive Officer for Net Entertainment.

“Despite this, revenues increased by 27.2 percent, 42.3 percent in local currency, compared to the same period last year.

“The online gaming industry is changing to a regulated and more mature market, which leads to near-term challenges and significant opportunities in the longer term. This means increased costs for Net Entertainment driven by adjustments for the regulatory demands and more complex integrations.

“Meanwhile, we have a stable order backlog consisting of Stan James and Expekt, who will start to generate revenues primarily in the fourth quarter. The additional delays announced by the Italian gaming authority mean that the agreements we have signed are estimated to start generating revenues at year-end.

Our close working dialogue with AAMS and the customer base we have established in Italy creates a very strong position for Net Entertainment when the market is allowed to open. The regulatory development in France has resulted in challenges for some of our customers which impacted our business during the quarter.

“We continue to reap the results of our sales success and during this quarter we signed three agreements with leading gaming operators. In addition, an important bridgehead to the South American market was established by signing a new license agreement with one of the largest gaming operators in South America, Betboo, in July. South America is one of many interesting geographical regions on which we will increase our focus going forward. For all of the three tier-one operators with whom we signed agreements during the quarter, we will replace the existing casino supplier, which is very pleasing.”



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