Increased interest in Swedish racing boosts ATG in H1
Sweden’s AB Trav och Galopp says that the suspension of sporting events as a result of novel coronavirus (Covid-19) in the first half of 2020 benefitted its performance, as customer attention shifted to its core horse race betting product.
Revenue for the six months to 30 June increased 33.2% year-on-year to SEK3.06bn (£265.3m/€295.5m/$348.2m), of which gaming revenue accounted for SEK2.54bn.
The contribution from betting on horse racing grew 19.0% to SEK2.18bn. ATG said that while most sporting events were suspended as a result of Covid-19, Swedish racing continued, which led to increased national and international interest in the vertical.
The main race in the country’s trotting calendar, the Elitloppet at Solvalla racecourse, for example, saw a record 18 companies taking bets on the event.
Its pool betting game V75, meanwhile, saw an additional seven jackpots on offer, helping drive customer activity further.
Despite the lack of sporting events from March onwards, ATG was nevertheless able to grow sports betting revenue, which climbed 26.5% to SEK148m. This was due in part to figures from igaming operator Ecosys, acquired in 2017, not being consolidated until 1 April 2019.
Online casino revenue, meanwhile, grew 50.0% year-on-year to SEK207m.
The vast majority – SEK1.91bn, or 75.3% – off first half gaming revenue was generated online, with retail’s contribution declining 3.1% to SEK628m. ATG generated a further SEK158m from its retail partners, while other revenue – comprising rights fees for racing coverage – rose 37.4% to SEK364m.
Turning to outgoings for the period, ATG saw gaming tax paid in H1 grow to SEK505m, with personnel costs rising to SEK220m. Other revenue-related costs remained the largest outgoing, though declined year-on-year, to SEK1.22bn.
After SEK36m in capitalised development costs and SEK137m in depreciation and impairment charges – resulting from work to redevelop and enhance its product range – the business’ operating profit jumped 72.9% to SEK1.02bn.
After SEK4m in financial expenses, plus SEK46m in income taxes, the operator’s net profit for H1 rose 70.8% to SEK970m.
This followed a strong second quarter performance, with revenue for the three months to 30 June up 33.2% to SEK1.74bn.
This comprised SEK1.43bn in net gaming revenue, which broke down to SEK1.28bn from horse racing (up 34.2%); SEK46m from sports betting (down 27.0%), and SEK110m from online casino (up 42.9%). ATG’s share of revenue from sales agents came to SEK85m, while other revenue grew to SEK225m.
After gaming taxes and operating costs, ATG’s operating profit for the quarter more than doubled to SEK677m. Once SEK6m in finance-related outgoings and SEK28m in income taxes, this left the business with a net profit of SEK643m, up 121.0% from the prior year.