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Svenska Spel revenue and profit decline despite digital growth

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Swedish state-owned operator Svenska Spel has released its results for 2020, as growth in digital revenues failed to offset the losses suffered due to the closure of its land-based business.
Kindred Svenska Spel ATG Swedish

Net gaming revenue for the 12 months ended 31 December 2020 amounted to SEK7.67bn (£667.1m/€761.6m/$923.8m), down 9% from the previous year (excluding non-recurring revenue of SEK163m, which was all received in Q4)

The closure of the operator’s Casino Cosmopol chain of land-based casinos as a result of the novel coronavirus (Covid-19) pandemic resulted in a SEK777m reduction in net gaming revenues, it said.

Excluding its land-based casino operations, which brought in SEK886m the operator saw a 1% increase in net gaming revenue to SEK6.78bn.

The Tur lottery division made up most of this revenue, up 2.0% at SEK4.84bn, while the Sport and Casino digital brand brought in SEK1.95bn, down 8.0%.

The operator said its digital business was growing strongly, accounting for 46% of revenue in 2020, compared to 35% in 2019. This was despite temporary measures on online casino including a SEK5000 deposit cap, which Svenska Spel said “squeeze revenue and reduce revenue growth”. The Tur lottery business also broke online sales records during Q4.

Operating profit for the group was down 3% from 2019 at SEK2.40bn. The closure of its land-based operations resulted in a SEK441m reduction in operating profit, the operator said. Net profit for the year came in at SEK1.87bn, down 31% on 2019.

Of the full-year net gaming revenue, SEK2.13bn was brought in during Q4, down 14% on the same period last year.

The closure of physical casinos reduced net revenues by SEK250m in Q4, resulting in a decrease of SEK121m in operating profit.

Excluding casino operations, however, net gaming revenue was up 3% for the quarter. Net profit for the period came to SEK547m, down 18% from Q4 2019.

“We have good profitability for the Group and strengthen the operating margin for both the quarter and the full year 2020, despite the fact that our physical casinos have been closed for three quarters.”

“As in the previous quarter, revenues for our Sport & Casino and Tur business areas are increasing. This shows strength and stability that two out of three business areas deliver growth despite the fact that they are also affected by covid-19 in the form of temporary gaming responsibility measures and reduced sales in stores,” said Patrik Hofbauer (pictured) president and chief executive of Svenska Spel.

Patrik Hofbauer

In August 2020, the operator’s board decided to permanently close its casino operation in Sundsvall due to a decline in profits and footfall at the property. This decision carried a non-recurring cost of SEK81m, it said.

In November, Sweden’s government launched a consultation on extending temporary controls for online casino, including the controversial SEK5,000 weekly deposit limit, until June 2021.

The government said its aim was to better protect players throughout the Covid-19 pandemic.

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