Finance

Enlabs posts Q2 profit despite Baltic shutdown

3 minutes read
Baltic-facing operator Enlabs remained profitable in the second quarter despite revenue falling by a third and the temporary closure of Latvia's gambling market as a result of novel coronavirus (Covid-19).

Baltic-facing operator Enlabs remained profitable in the second quarter despite revenue falling by a third and the temporary closure of Latvia's gambling market as a result of novel coronavirus (Covid-19). 

In a trading update for the three months to 30 June, Enlabs said total sales amounted to an estimated €6m, which was down from €9m in the same period in 2019.

The operator said the quarter brought major challenges as all gambling activity was temporarily suspended in Latvia – where it is the largest online operator – from 8 April to 10 June.

All online and land-based gambling in Latvia was halted from 22 March to 9 June, and in Lithuania, land-based operations were shuttered from 18 March to 18 May. Revenue was also impacted by the cancellation of sporting fixtures.

The Nasdaq First North Growth Market-listed operator said it responded to the challenges caused by the novel coronavirus (Covid-19) outbreak by implementing a number of operational and cost-reducing measures.

“Enlabs is of the opinion that these measures will contribute positively to the company's future results from the third quarter of the year,” it added.

The operator said it recorded an estimated profit on both EBITDA and net profit level of €500,000. Enlabs further assesses that the quarter's operating cash flow was positive. All figures are estimated and have yet to be audited, with an interim report for H1 to be published on 20 August 20.

Enlabs said all operations are back where they were before Covid-19 hit. All Enlabs offices are open and approximately 75% of the staff have returned to the workplace, although the option to work from home remains for most employees.

The 21 days in June that Enlabs operated online in Latvia, since its reopening, show an increase of 10% in average gaming revenue per day compared to the same figure for Q1 2020, and an increase of 21% compared to Q2 2019.

The gaming stores in Latvia and Lithuania show a decrease of 3% for the same period compared to the same figure for Q1 2020 and a decrease of 19% compared to Q2 2019. The gaming stores accounted for a total of 4% of Enlabs’ total sales in Q1 2020.

During the first two weeks of July, Enlabs’ gaming revenues were at the same level as during the same period in 2019, despite the fact that the period 2020 showed a gaming margin of less than last year by 25% due to a number of major casino winnings. The number of active customers increased by 15% and deposits increased by 14%.

“Enlabs customers have welcomed the reopening in Latvia with very high activity in all product verticals as a result,” George Ustinov, Enlabs’ president and chief executive, said.

“Enlabs’ team has navigated in a fantastic way through the challenging period that the second quarter of the year came to be as a result of the extraordinary circumstances that came to be. It is my opinion that we as a company have emerged from the ongoing crisis stronger, more welded together and with an even clearer goal-oriented focus.

“With this behind us, we are now looking forward to the second half of the year with a strong assurance that the measures we implemented during Q2 will contribute positively to our operations from many different aspects.”

In May, Enlabs reported a year-on-year increase in revenue for the first quarter of 2020, with growth across all major gaming segments. Revenue in the three months to 31 March amounted to €10.5m, up 16.7% from €9.0m in the same period last year.

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