Growth continues at Net Entertainment

Net Entertainment investors will not be too displeased with the latest set of quarterly results released Thursday by the company, which tell a story of continued success through growth, although quarterly profit after tax was almost SEK 2 million down..

The company’s Q1-2013 results to end March this year included the following highlights:

* Revenues for the first quarter increased by 16.7 percent to SEK 148.8 (127.5) million

* Operating profit was up at SEK 41.0 (40.1) million

* Operating margin eased to 27.5 (31.4) percent

* Profit after tax came in at SEK 32.9 (34.6) million

* The company reported signing six new licence agreements in the quarter, and three new online casinos were launched for clients.

* Agreements were signed with Bonza Gaming and 888, and the Bonza Gaming site was launched

* Five agreements with existing customers were inked, calling for the delivery of NetEnt‘s Live Casino product. In total, four customers launched by the end of the quarter

* Continued strong growth in Italy was experienced, making it Net Entertainment’s second largest market in the first quarter

* Five agreements were signed with existing customers for delivery of the company’s Mobile Touch offering.

Per Eriksson, Net Entertainment’s president and CEO, said the quarter had continued to produce strong growth, with revenues well up thanks primarily to increased volumes from existing customers and set-up fees from new customer agreements.

“In January we also saw a somewhat positive impact from the jackpot game Mega Fortune which reached new record levels with a jackpot amounting to SEK 17.8 MEUR,” Eriksson noted.

“The number of game transactions also reached a new record of 3.9 billion transactions in the first quarter which is an increase of approximately 30 percent compared to last year.”

Eriksson said the Bonza Gaming and 888 deals were particularly pleasing, noting:

“Under the terms of the agreement with Bonza Gaming, Net Entertainment will deliver a wide range of slot games and other casino gaming for real-money gaming on Facebook. Online operator 888 is one of the most well reputed operators in the world and the agreement means that Net Entertainment will deliver some of the Company’s online and mobile games to 888 on a global basis. The platform integration with 888 is ongoing.”

Net Entertainment’s Live Casino product was doing well, Eriksson said, revealing that 16 contracts with operators had so far been signed, with four already in operation.

Mobile was also performing well, with demand high and 39 contracts sealed, 25 of which had already been launched.

“We continue to follow our strategy, preparing for future growth and investments in customers, products and systems,” Eriksson said.

“Several initiatives, including Live Casino and the entry in Great Britain are still in very early stages and hinder our profitability short-term.
Eriksson reported that discussions are on-going in a number of countries in Europe and the US.

“We are looking at what opportunities can open up in the US, but do not underestimate the challenges that such an effort would mean. We continuously monitor the potential on new markets that are about to regulate, and carefully evaluate when and how Net Entertainment can take action,” he concluded.

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