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Net Ent Releases Financials, Notes Record Profits

Swedish gambling firm Net Ent has released their newest set of financial results, noting record profits for the fourth quarter and full year of 2015.

Key financial indicators for the fourth quarter of 2015 were:

  • Revenues increased by 34.0% to SEK 323.1 (241.1) million
  • Operating profit amounted to SEK 121.8 (80.3) million, an increase of 51.6%
  • Operating margin was 37.7 (33.3)%
  • Profit after tax amounted to SEK 115.7 (77.1) million, an increase of 50.0%
  • Earnings per share amounted to SEK 2.89 (1.93) after dilution
  • 14 license agreements with new customers were signed, 16 new customers' casinos were launched

Full year 2015 financial results were:

  • Revenues for the full year increased by 33.0% to SEK 1,132.4 (851.7) million
  • Operating profit amounted to SEK 401.6 (261.7) million, an increase of 53.5%
  • Operating margin was 35.5% (30.7%)
  • Profit after tax amounted to SEK 374.0 (243.2) million, an increase of 53.8%
  • Earnings per share amounted to SEK 9.34 (6.09) after dilution
  • 43 new license agreements were signed and 37 new customers' casinos were launched
  • Proposed transfer to shareholders is SEK 8.00 (5.00) per share

Commenting on the company's performance Net Ent CEO Per Eriksson said, "2015 was yet another fantastic year for NetEnt. Continued growing demand for digital casino entertainment and for our products helped us reach new record levels in terms of revenues, results and cash flow. The fourth quarter featured many new signed and launched customers, and strong growth. Revenues increased by 34.0 percent to 323.1 MSEK and operating profit rose by 51.6 percent to 121.8 MSEK, compared to last year. The operating margin was 37.7 percent in the fourth quarter, the highest level since the beginning of 2010. The number of game transactions in our systems increased by 34.4 percent to 8.2 billion, which means that in 2015, we handled a total of 27.7 billion transactions.

We continue to deliver on our long-term strategy for profitable growth with new products, new customers and new markets. In the fourth quarter we signed 14 new customers and launched 16 new customers, while we continued to see strong underlying growth among our existing customers. The expansion in New Jersey continues according to plan and during the quarter we launched Golden Nugget, Caesars Interactive and Resorts Casino. We also signed Gamesys US for the brands of Tropicana and VirginCasino in New Jersey, meaning that we have customer agreements with all the major online operators in the state. UK and mobile games continue to be particularly important growth drivers. Gamewin from the UK more than doubled compared to the same quarter last year and the UK is now the second largest market for us in terms of revenues. Gamewin from mobile games rose by 144 percent compared to the fourth quarter of last year and accounted for 30 percent of our total gamewin. During the year we shifted all our game development to HTML5, which brings synergies and will support innovation and quality in our game development going forward. We are currently developing a mobile solution for Live Casino, a product segment that looks very interesting going forward.

Customer satisfaction is the foundation for our long-term growth and our approach is to have a business partner mindset for shared success. In our annual customer survey, 99 percent of all our customers expressed that NetEnt has a top reputation in the industry. Innovation is a key word in everything we do and in November we won the prestigious prize "Game of the Year" at the EGR Operator Awards with Spiñata Grande, a creative and thrilling game inspired by the colorful Mexican concept called piñata. In total, we won seven industry awards in 2015, in various categories for innovation and quality. In November, a truly synced multichannel release took place with Koi Princess, a game jointly developed with William Hill that was also released on gaming machines in betting shops across the UK.

Dedicated and talented employees are a key success factor for NetEnt and we continued to recruit new competence in the fourth quarter. Our new Chief Development Officer Åsa Bredin joined the organization in October, coming from previous senior positions at King and Betsson. NetEnt keeps growing internationally and we are opening a new game development studio in Polen. In November we also signed a new rental agreement for a move to new attractive offices in central Stockholm. The move will take place at the end of 2016 and will strengthen our creative and fast-growing organization.

There is a clear trend - people spend more and more time and money online, consuming digital entertainment including online casino games. The global online gaming market is supported by ongoing migration from land-based gaming. We will continue to focus on premium digital casino solutions, solutions that enable success for our customers. We see good conditions for continued strong growth in 2016 supported by growing market shares in the UK, a large pipeline of signed customers yet to be launched, mobile growth and the expansion in North America."

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15 February 2016 - 9:31pm

The Net Ent growth in numbers is just great but not a surprising really. Their games are one of the best on the market but it also looks like the company has a clear vision of how should be developed which I think is no less important than their products it self.