Thursday May 5,2016 :  CZECH REPUBLIC TAXES DILUTE FORTUNA'S SUCCESS
 
Online gambling group is paying taxes of up to 23 percent.
 
Heavy taxation has taken some of the sparkle off otherwise decent first quarter results posted Thursday by the Czech Republic-based Fortuna Entertainment gambling group, prompting Management to warn that FY EBITDA could be 10 to 15 percent lower than expectations.
 
Q1-2016 highlights included:
 
* Year-on-year stakes up 26.3 percent to Euro 251.7 million;
 
* Gross Win revenues up 7.6 percent at Euro 38 million;
 
* 37 percent decline in group EBITDA to Euro 4.6 million due to higher betting and lottery taxes imposed by the Czech government, and the abolition of online handling fees in Slovakia;
 
Per Widerstrom, CEO of Fortuna Entertainment Group observed that online operations continued to shine, commenting:
 
“In the first quarter of 2016, the company continued to deliver strong growth in Amounts Staked and we accepted total bets in the amount of Euro 251.7 million, which is 26.3% more than last year. The Amounts Staked grew double digits in all our key markets, primarily driven by online betting growth and in particular mobile sports betting while retail grew low single digit.
 
"Our operating profitability measured by EBITDA was impacted by the increase in the betting tax rate in the Czech Republic, unfavourable margin development especially in February and by planned increase of operating costs to support future growth opportunities of the company,”