Stockholm-listed Betsson AB reports a further trading quarter of corporate adjustments, as the online gambling group continues to experience multiple challenges across its core operating markets.
Publishing its Q3 2019 trading update (period ending 30 September), Betsson continues to report ‘weak trends’ across Sweden and the Netherlands, recording an 11% decline in group revenues to SEK 1,275 million (Q3 2018: SEK 1,426m).
Competing against a tough comparative period featuring World Cup 2018 trading, Betsson reports a 12% decline in casino revenues to SEK 942 (Q3 2018: SEK 1,066m), while sportsbook revenues declined 7% to SEK 314 million (Q3 2018: SEK 338m).
A breakdown of performance sees Betsson governance report that its regulated market taxed income increased by 41% during the trading period to SEK 457 million (Q3 2018: SEK 322m) – equivalent to 36% of group revenues.
“Like the previous quarter, the third quarter has continued to pose challenges for us, as well as for several other companies in the gaming industry,” said Betsson Group CEO Pontus Lindwall. “We expect this development to continue and also affect the Swedish market to a greater extent than we have seen so far after the Swedish re-regulation.
“The regulated markets now also face major challenges regarding the degree of channelisation, which is one of the most important prerequisites for high consumer protection.”
Impacts on group revenue channels would see Betsson operate at an EBIT margin of 16.7% (24%), as the Stockholm enterprise records a 28% decline in EBITDA to SEK 305 million (Q3 2018:423m).
Countering its challenges, Betsson reduced operating expenses to SEK 618 million (Q3 2018: SEK 669m), as governance highlights ‘continuous work on efficiencies’ and marketing expenses scaled back to SEK 213 million (Q3 2018: SEK 246m).
Updating investors, Lindwall noted market realities but also stressed Betsson’s strength in its geographical range and its intention to grow through potential acquisitions.
“Both revenue and operating profit are affected when significant markets develop negatively at the same time,” he added. “Therefore, our geographical spread is valuable, and we see positive development in several of Betsson’s other markets, both locally regulated and non-locally regulated. We have seen favourable trends in other Western European countries but also in Central & Eastern Europe and Central Asia (CEECA).”