Tough Opening…Currency impacts & increased tax duties hit Betsson AB’s Q1 2017 performance

Ulrik Bengtsson

Publishing its Q1 2017 interim results (unaudited period ending 31 March), Stockholm-listed European online gambling group Betsson AB has reported that its period earnings and profit results have been impacted by negative currency fluctuations, increased market taxes and player friendly results recorded by its sports betting division.

Updating investors, Betsson would report a 10% increase in group revenues to SEK 1.1 billion (€115 million), driven by the continued strong performance of its online casino division which recorded a period increase of 23% SEK 882 million (Q1 2016: SEK 669 million).

Closing its opening quarter, Betsson governance would report Q1 2017 Gross Profit of SEK 806 million (€83 million), up 8% on corresponding 2016’s SEK 745 million.

However, negative currency impacts recorded during the period would hit Betsson’s group operating margins and earnings. The company details that currency impacts cost circa SEK 19 million on its Q1 2017 bottom-line.

Furthermore, Betsson governance has detailed a significant increase in its operating markets which to circa 20%, with the company paying period betting duties of SEK 43 million.

As a result of margin impacts, Betsson group would post an operating net income of SEK 214 million (€22 million) down 8% on corresponding Q1 2016’s SEK 234 million.

Updating the market, Ulrik Bengtsson, CEO of Betsson AB, commented on corporate performance:

“Casino continues to develop well with growth of 23 percent. Total revenue increased by more than 10 percent, compared to the same period previous year, of which most was organic growth. As we indicated before, region Western Europe is back to a healthy growth. The region grew by 15.6 percent compared to the same period previous year. The combined effect of currency fluctuations had a negative impact on operating income of SEK 19.1 million.”

“In addition, a high proportion of ”player-friendly” results in the big football leagues resulted in a lower sportsbook margin than the eight-quarter rolling average and thereby lower revenue. The operating income was SEK 240.9 million, corresponding to an operating margin of 21.9 percent.”

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