Net Entertainment Releases Record Financial Results

Sweden based internet gambling software provider Net Entertainment has released its first half 2012 financial results, with an emphasis being placed on the company's highest recorded revenues ever during the period.

Key financial indicators for the second quarter ending June 30th were:

• Revenues for the second quarter increased by 32.2 percent to SEK 132.0 (99.9) million compared with Q2-2011

• Operating profit amounted to SEK 39.6 (27.2) million

• Operating margin was 30.0 (27.2) percent

• Profit after tax amounted to SEK 36.7 (25.1) million

• Earnings per share amounted to SEK 0.93 (0.64) before and after dilution

• Five new license agreements were signed and four new customers’ casinos were launched

Key financial indicators for the first half of 2012 so far are:

• Revenues for the first six months increased by 33.0 percent to SEK 259,5 (195.1) million

• Operating profit amounted to SEK 79.7 (53.5) million

• Operating margin was 30.7 (27.4) percent

• Profit after tax amounted to SEK 71.4 (48.0) million

• Earnings per share amounted to SEK 1.80 (1.21) before and after dilution

• Ten new license agreements were signed and eight new customers’ casinos were launched

Net Entertainment attributed its record revenues to customer growth.

During the second quarter Net Entertainment processed 2.9 billion gaming transactions, which is down 3% from the first quarter. However, making up for the drop in wagers was an increased betting level per user, which boosted revenues to record numbers.

Commenting on his company's performance and recent reorganization, Net Entertainment President and CEO Per Eriksson said: "The purpose of the changes was primarily to make the decision making process more effective through a flatter organisational hierarchy and meant that certain management positions were eliminated, such as the CTO. The reorganisation resulted in non-recurring costs of SEK 2.5 million in the second quarter."

"These projects have not yet started to generate any new revenues to the company, or have not yet reached the full potential, such as in Italy, but are expected to generate significant value for Net Entertainment in the future. As these projects are completed the investments will in certain cases decrease while other projects will require further development to maintain competitiveness. In addition, Net Entertainment will continue to invest as new opportunities arise."

Speaking about the company's moves in the mobile sector, Eriksson said: "There is a high interest in the market and the company has signed a total of 17 contracts since launch, of which eleven are live. During the quarter, development of mobile games for Android units continued and we have now launched two customers."