Q3 results 2020

Enlabs hails “tremendous recovery” in Q3

3 minutes read
Baltic-facing operator Enlabs saw revenue grow 35.5% to €13.6m and profit quadruple to €10.3m as the acquisition of Global Gaming helped the Optibet operator recover from a difficult Q2.

The business said it bounced back a Q2 in which revenue fell 35.0% due to a ban on online gambling in Latvia for most of the quarter, while the country was under lockdown due to novel coronavirus (Covid-19), though the business still made a profit in that quarter.

“The Enlabs group executed a tremendous recovery after the stormy spring of 2020,” the operator said.

Almost all of Enlabs’ revenue – €13.0m, up 41.9% – came from gaming. Of this total, €10.2m was from online casino, up up 78.9%. 

This growth, the business said, was partly due to the acquisition of Global Gaming, of which one month’s revenue was included in Enlabs’ figures, and also thanks to pent-up demand in Latvia after its online gambling suspension ended in June.

A further €2.7m, down 6.9%, was from betting and poker revenue came to €100,000 amid its migration to Playtech software. A negligible amount of additional revenue came from Enlabs’ new bingo product, which was launched during the quarter.

While betting revenue recovered from Q2, Enlabs said there was still “some way to go” before the vertical is fully back on track again following the impact of Covid-19.

The group’s overall margin was 4.2%, up from 3.8% in 2019, meaning players bet €307.1m on non-poker games. Casino margins were up to 3.8%, for €268.4m in stakes, while online betting margins grew to 7.4% and retail betting margins declined to 8.2%.

A further €328,000, down 45.3%, came from Enlabs’ affiliate sites while €262,000, down 3.4%, came from other sources.

Enlabs made €11.0m of its revenue from its old core business, plus an additional €2.5m from Global Gaming.

Turning to outgoings, Enlabs paid €4.2m in direct operating costs, up 56.9%, comprising €2.9m in costs of services sold and €1.3m in gaming taxes, up 35.1%.

The operator paid a further €5.4m in operating expenses, up 26.3%. This included €2.7m in staff costs, up 24.2%, and €1.9m in marketing expenses, up 11.1%, as well as €1.3m in other expenses.

This left earnings before interest, tax, depreciation and amortisation (EBITDA) of €4.0m, a 29.6% year-on-year improvement.

After an additional €798,000 in depreciation and amortisation costs, Enlabs’ operating profit was up 25.9% to €3.2m.

The business then made an additional €7.0m in financial income, compared to a €20,000 loss the year prior, for a pre-tax profit of €10.3m. This extra income was largely due to revaluation of Enlabs’ investments in Scout Gaming and Global Gaming.

After receiving €17,000 in tax benefits, Enlabs’ final profit remained at €10.3m, four times the profit it made in Q3 of 2019.

Enlabs had 67,320 active customers during the quarter and players deposited €45.9m, up 54% from deposits in Q3 2019.

Between the growth in revenue, the Global Gaming acquisition and the migration of Enlabs’ Optibet.lv site to a new platform, George Ustinov described Q3 of 2020 as a  truly transformational quarter”.

Ustinov added that the business is pursuing a licence in Ukraine, which legalised both land-based and online gambling earlier this year. It has set up a legal entity in the country as is required for a licence.

Enlabs said that it is off to a strong start in Q4, with average daily gaming revenues in October up by 86% from 2019.

Yesterday, the business announced that it had increased its stake in Global Gaming to 95.8%, allowing the Ninja Casino operator to delist from the Nasdaq First North Growth Market.