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Online gambling software developer Cryptologic released its financial results for the three months and full year ended December 31, 2009 this week, showing reduced revenues as a result of lower wagering activity across the industry, adverse currency factors, and a reduced contribution from a key licensee.
Revenue decreased to $39.8 million (2008: $61.5 million), whilst net losses of $35.5 million (FY 2008: $32.7 million) were posted thanks to $24.8 million in non-recurring charges for asset impairments and restructuring to align the company's costs with its revenue base.
Total annual recurring cost base, which comprises operating, general and administrative, finance and amortisation expenses, was reduced by $20.6 million to $55.0 million.
On the positive side, branded games revenue increased to $2.8 million (2008: $300,000), accounting for 7.1% of total revenue (2008: 0.5%) despite a slower-than-anticipated roll-out by licensees. The company has signed deals with DC Comics to develop betting games featuring Batman, Superman and Wonder Woman; and with Paramount Digital Entertainment for games based on 20 movies including Braveheart, Forrest Gump and Ghost.
Fourth quarter 2009 highlights included:
In 2010, Management expects to see improved revenue from its hosted casino operations as new licensees go live and existing licensees benefit from Crypto's investment in major rebranding, a new lobby and advertising initiatives.
The popularity of branded games should continue to gain momentum with the annual run rate currently at $5 million as more games come on stream; licensees have launched 74 branded games to date, leaving a backlog of around 125 games.
Costs are expected to decline further as additional measures are implemented to manage overheads
Chief Executive Officer, Brian Hadfield, said: "2009 was a tough year as a number of adverse factors including a global economic downturn overshadowed the company's progress in implementing its innovative new strategy to reduce costs and return to growth.
"We have entered 2010 in better shape with a substantially reduced cost base that will continue to be managed tightly. At the same time, new business momentum remains encouraging as branded games continue to roll out and hosted casino licensees implement new initiatives. With new licensing activity staying strong and the overall online casino/gaming market showing some improvement, we look to the year with cautious optimism."
Source: InfoPowa News