Danske Spil board hails efforts to minimise H1 Covid-19 hit
Danish gaming operator Danske Spil saw revenue decline 7.8% year-on-year to DKK2.30bn (£281.1m/€309.1m/$365.2m) for the six months to 30 June, though like-for-like profit fell by just 2.9% thanks to a strong period for its lottery division and lower costs.
The operator’s board said the business managed to minimise revenue decline and lower costs for the year to date. This, it said, helped set the business on track to meet its initial earnings targets for the year, surpassing the revised projections announced following its first quarter results.
“Overall, Danske Spil has succeeded in maintaining a satisfactory turnover at its casino and several of our other consumer facing offerings,” the board explained. “Combined with a reduction in the company's costs – not least the marketing costs – this has meant that Danske Spil is back on track in relation to its [full year] profits.”
Of the operator’s revenue, DKK1.30bn came from the Danske Lotteri Spil lottery business, up 5.2% from 2019. The operator noted that a large reason for this was a high number of especially large jackpots from the Eurojackpot lottery.
However, this was offset by a 15.7% decline in revenue from the Danske Licens Spil online gaming division, which brought in DKK894.4m.
Gaming hall and slot manufacturer business Elite Gaming was revenue drop 48.1% to DKK98.1m while the Swush fantasy sports business took in just DKK2.1m, down 48.1%.
“The first half of 2020 has been challenging in every way for Danske Spil,” the board said. “Covid-19 saw sporting events across the globe cancelled, and thus put a stop to most sports betting and simultaneously the lockdown of Danish society affected all of our customers as well as physical venues and arcades.”
Danske Spil paid DKK230.8m in state gaming taxes, down 23.9% thanks in part to higher dependence on the lottery division, and DKK266.8m in dealer commissions, down 23.7%. Other direct costs from gaming totalled DKK133.7m, down 19.7%.
This resulted in an operating profit of DKK1.67bn, down just 0.3% year-on-year.
The operator brought in DKK17.1m in other income, up 2.4%. However, it paid DKK147.0m in staff costs, down 1.3%, while other external expenses fell 7.4% to DKK333.1m, and depreciation and write-down expenses rose 25.9% to DKK158.7m.
The vast majority of this profit, at DKK878.9m, came from Danske Lotteri Spil, up 7.0%. Danske Licens Spil's profit declined by 20.9% to DKK181.5m. Elite Gaming made a loss of DKK9.5m, compared to a DKK9.6m profit in the prior year, while Swush lost DKK600,000, after recording a profit of DKK700,000 in 2019.
This resulted in a profit before financial items of DKK1.05bn, down 0.8%.
Danske Spil icncurred finance related costs of DKK29.7m, up 241.3%, for a pre-tax profit of DKK1.02bn, down 2.9%.
After paying taxes of DKK223.8m, Danske Spil posted a net profit of DKK794.4m, also down 2.9% year-on-year. After accounting for discontinued operations – namely game developer CEGO, from which Danske Spil divested last year – in 2019’s results, however, Danske Spil’s profit was 9.0% below the year prior.
For the year, Danske Spil now expects gross gaming revenue of around DKK4.5bn to DKK4.7bn and profit to fall between DKK1.3bn and DKK 1.4bn.