Bwin.party's Third Quarter Financials Disappoint

Internet gambling giant Bwin.party digital entertainment plc released its third quarter 2013 financial results on Friday, posting revenues that were down 5% from the same period last year.

Key financial indicators for the period ending September 30th were:

• Average daily revenue for Q3 down 8% versus the prior year.

• Total revenue for the nine month period to 30 September of €594.5 million, down 1% (2011: €599.1 million)

• Q3 revenue was adversely impacted by German sports betting tax, a poor run of sporting results in European football, a decline in poker and a challenging macroeconomic climate in southern Europe

• Strong current trading since 30 September in all verticals with average net daily revenue up 19% compared with Q3,2012

• Agreement signed with Zynga to supply real money poker and casino in the UK

• Sale of Ongame to Amaya Gaming completed

• Real money signups declined 34% to 282,700 (Q3-2011: 430,400)

• Net revenue slipped to €175.7 million (Q3-2011: €195.7 million)

• As at 30 September 2012, the Group had cash (and cash equivalents) plus short-term investments of €204.6 million and processor receivables of €63.5 million.

• Bank borrowings of €27 million and client liabilities (including progressive prize pools) of €138.2 million resulted in net company cash of €102.9 million, slightly down from the €117.1 million available at the end of June 2012.

• During the period, the final instalment of $15 million was paid in accordance with the Group’s Non-Prosecution Agreement and the sale of Ongame to Amaya Gaming was completed.

Commenting on the results, Co-CEOs Jim Ryan and Norbert Teufelberger said: “The introduction of a 5% turnover tax on sports betting in Germany, revenue decline in poker and continued pressure on consumer spending, particularly in parts of southern Europe, held back our performance in the third quarter."

“An unfavourable run of football results in our core markets in September together with the previously announced delay to the start of the Bundesliga were also contributing factors."

"However, we are encouraged by a marked recovery in trading across all products since 30 September."

“The macroeconomic outlook in most of Europe remains fragile, with consumer spending under pressure, particularly in southern European markets. While the headwinds associated with the transition to regulated markets and the impact of gaming taxes can be expected to continue, given the completion of our technology integration and the next evolution of each of our core products due in 2013, the Board remains confident about the full year result.”

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