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Net Entertainment Releases First Quarter 2015 Financials

Internet betting software developer Net Entertainment has announced the release of their first quarter 2015 financial results, noting higher revenues and profits.

Key financial indicators for the quarter ending March 31st, 2015 were:

  • Revenues for the first quarter increased by 37.1 percent to SEK 258.3 (188.4) million;

  • Operating profit came in at SEK 81.8 (51.2) million, an increase of 59.8 percent;

  • Operating margin was 31.7 percent (27.2%);

  • Profit after tax reached SEK 74.2 (46.1) million, an increase of 60.9 percent;

  • EPS were SEK 1.86 (1.17) before dilution and SEK 1.86 (1.16) after dilution.

Corporate highlights for the period were:

  • 11 new licence agreements signed, including Danske Spil in Denmark, Codere in Spain and Gamesys in the UK;

  • Seven new customers’ internet casinos were launched;

  • Casino games were launched with Rational Group´s Full Tilt;

  • Local licenses were obtained in the UK.

Commenting on the company's performance Net Entertainment CEO Per Eriksson said, "We have made a very strong start to 2015, reaching new record levels for both revenues and profits. Our innovative gaming solutions as well as our strong expansion on new and existing markets are among the reasons for the high growth and good profits.

"We achieved this strong increase despite our continuing investments in new staff and an enhanced mobile offering.

"During the quarter we handled a full 6.5 billion transactions in our systems, representing an increase of 30.8 percent from last year. Mobile gaming continues to grow fast and accounted for 20.6 percent of total game win in the first quarter – almost a doubling from the level in Q1 2014.

"Our growth strategy is to expand in regulated markets and in March we entered a licence agreement with Denmark´s largest gaming operator, Danske Spil, which is owned by the Danish government and is part of World Lottery Association (WLA). The agreement enables faster expansion in the country.

"In Spain, the online market for slot games has recently been regulated and in March we signed an agreement with Codere, one of the largest gaming operators in Spain with large land-based operations in Spain and Latin America, that has recently started to offer casino games online. As we have previously stated, we are hoping to obtain a Spanish licence this year, after which we could launch our games and see the first revenues.

"In the UK, new regulation was introduced in the autumn of 2014 and at the end of March we were granted local licenses from the UK Gambling Commission. During the quarter we continued to increase our market share with existing customers in the UK and our expansion in this market was a key contributing factor to the strong revenue growth for the company in Q1.

"We signed a new agreement with Gamesys, a leading British online gaming operator with well-known brands such as Jackpotjoy and Virgin Games.

"In Italy the process continues to cease deliveries to operators that have not started the licence application process in the country and, as previously communicated, our revenues could be negatively impacted in the short term.

"The licensing process in New Jersey continues according to plan with the aim to offer our products and services to this market in the second half of 2015.

"In the second quarter of 2015 all newly released games - for both desktop and mobile – will have been developed in HTML5, which is expected to bring some synergies going forward.

"In the first quarter we increased our portfolio of world-class games with the release of Spiñata Grande, Steam Tower and Tornado Farm Escape. We also announced a new and exciting project with Universal, in which we will develop a video slot game based on the music of the iconic rock band Guns N’ Roses.

"I look forward to the rest of 2015. We have strong momentum - our customer offering is world-leading and we are well prepared to seize new business opportunities on the growing digital casino market."

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