Kindred Profits Lower Due to Swedish Regulations

Online betting firm Kindred Group has posted their third-quarter 2019 financial results, noting that revenues and profits dip due largely to regulatory issues in Sweden.

Key financial indicators for the quarter ending September 30th, 2019 were:

• Gross winnings down 2% to £226 million
• Western European revenues of £135.1 million, up 3.6%
• Nordic regions down 16.4% to £66.4 million
• Central, Eastern, and Southern Europe generated £20 million, up 13%
• Other regions generated £4.5 million, up 25%

The bulk of the issues the company saw were due largely to Sweden's re-regulation of their market, which has plagued Kindred since January, as different terms make it hard to attract new players.

Speaking about the results Kindred CEO Henrik Tjärnström noted: "Similar to what we saw in the first half of 2019, re-regulation in Sweden resulted in difficult market conditions in the third quarter. The current terms and conditions make it challenging to attract customers into the system and can lead to worsening channelisation.

"This, in combination with a lower than usual sportsbook margin in September, resulted in significantly lower gross winnings revenue and a £12.8m decline in EBITDA contribution from Sweden compared to the third quarter in 2018.

"Outside of Sweden and the Netherlands, we continued to see strong growth in several other markets, including the UK and France. Locally licensed revenue growth was particularly strong with 33% growth, or 13% growth excluding Sweden, compared to the same period last year.

"As expected, this resulted in margin pressure from higher betting duties which increased with 26% compared to the same quarter last year. However, this focus will drive more sustainable future profit growth. Locally licensed markets were 57% of overall gross winnings revenue in the quarter."

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