Svenska Spel puts decline in H1 profit down to increased RG focus

| By Robert Fletcher
Swedish lottery and gaming operator Svenska Spel reported a small year-on-year decline in revenue and net profit for the first half of its 2022 financial year after only one of its main business segments experienced growth.

Net gaming revenue for the six-month period through to 30 June amounted to SEK3.90bn (£312.9m/€368.8m/$372.3m), down from SEK3.94bn in the first half of 2021.

The Tur lottery business remained the main source of revenue for Svenska Spel, generating SEK2.33bn, a decline of 3.2% from SEK2.41bn last year. The operator said this was mainly down to lower ticket sales than in 2021, due to the way public holidays fell this year.

Revenue from the operator’s online sport and casino segment also fell year-on-year, with the SEK1.04bn posted being 16.5% lower than SEK1.25bn in 2021. This was put down to the cancellation of some sporting events at the start of the year as a result of novel coronavirus (Covid-19) restrictions, as well as strengthened responsible gambling measures.

However, revenue for the Casino Cosmopol land-based business, plus its Vegas brand of slot halls and its chain of restaurant casinos, rocketed by 85.9% to SEK526.0m, following the reopening of these facilities in line with easing Covid-19 restrictions.

Online gambling accounted for SEK1.91bn in net gaming revenue, while retail lottery agents generated SEK1.46bn in revenue. Elsewhere, revenue from restaurant and bingo halls hit SEK279.0m and land-based casino SEK247.0m.

Turning to spending and operating expenses were 12.5% higher at SEK1.70bn. This included SEK577.0m in personnel costs, SEK946.0m worth of other external expenses and SEK173.0m worth of amortisation and write-downs of intangible and tangible fixed assets.

Operating profit was 3.8% lower at SEK1.13bn, while only minimal financial expenses meant pre-tax profit was also SEK1.13bn. Svenska Spel paid SEK233.0m in tax, leaving SEK892.0m in net profit, down 4.0% year-on-year.

In terms of the second quarter, revenue was up 1.3% to SEK1.96bn. Tur revenue was level at SEK1.19bn, and while online sport and casino revenue fell 19.1% to SEK484.0m, revenue from Casino Cosmopol jumped 94.6% to SEK286.0m.

Operating expenses were 12.4% higher at SEK877.0bn, while operating profit was 7.5% down at SEK531.0m. Financial income of SEK4.0m meant pre-tax profit was SEK536.0m, while after paying SEK111.0m in tax, this left SEK425.0m in net profit, down 6.2% year-on-year.

Svenska Spel president and chief executive Patrick Hofbauer said that while revenue was down, the share of revenue from players deemed to be “healthy” gamblers increased.

“The share of healthy revenues and healthy customers increased during the second quarter of the year,” he said. “The group’s revenues increase as Casino Cosmopol was open this year.

“The group’s earnings and operating margin decreased somewhat as a result of increased costs in priority investment areas, but also as an expected effect of our focus on sustainable gaming.

“Our great commitment and our investment in research continues, because it is important that we constantly increase knowledge and learn more about preventing problems and gambling addiction – but also to be able to spread the insights from the research to the entire gambling industry.”

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