Unfavourable sporting results combined with higher operational costs have impacted Eastern European gambling operator Fortuna Entertainment Group Q1 2017 performance.
Updating investors Fortuna governance would detail ‘robust’ set of metrics during the period as the company recorded a total group wagering of €302 million up 20% on corresponding 2016 performance.
Closing the period, Fortuna would further report a Gross Win of €42.2 million (up 12% on Q1 2016), with the company highlighting its online sports betting division which contributed €28.3 million of Gross Win.
However, the firms 2017 opening performance would be severely impacted by negative sports results recorded in February and March which would impact operating margins, as Fortuna recorded a group EBITDA of €3 million (-36% on Q1 2016)
Fortuna governance informs that the company had made significant investments within its internal operations upgrading its data feed, live streaming capabilities, IT systems and resources.
Further costs have been attributed to period M&A costs as Fortuna governance acquired Hattrick Sports assets (deal undisclosed) and Fortbet Romanian (deal €47 million) properties during the period.
Per Widerström, CEO of Fortuna Entertainment Group commented on Q1 2017 performance
“In the first quarter of 2017, the Company continued to deliver robust growth in Amounts Staked and we accepted total bets in the amount of EUR 302.2 million, which is 20.1% more than last year. The Amounts Staked grew double digits in all our key markets, primarily driven by the online betting growth and in particular mobile sports betting while retail grew low single digit.
“We also recorded in this quarter the first bets from the recently launched online casino in the Czech Republic of which we started as the first regulated operator at the end of February. Our operating profitability measured by EBITDA was impacted by lower margins due to unfavourable sports results across all markets and the planned increase of operating costs in connection with building operational excellence and CEE expansion,”