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NetEnt fails to meet expectations despite growth

| By iGB Editorial Team
NetEnt has said that despite reporting year-on-year growth across various key financials in 2017, it was unable to meet its initial expectations

NetEnt has failed to hit initial expectations, despite reporting year-on-year growth across various key financials in 2017.

NetEnt has reported revenue of SEK1.63bn (€163.7m/$205.3m) for the 12 months to December 31, 2017 – an increase of 11.7% on the SEK1.46bn posted in the previous year.

Operating profit hiked 9.5% year-on-year to SEK587m with a margin of 36.1%, while profit after tax was also up 9.5% from SEK504m to SEK552m.

Earnings per share both before and after dilution also increased from SEK2.10 to SEK2.30.

In addition, NetEnt has proposed a cash distribution to shareholders of SEK2.25 per share, the same amount as at the end of 2016.

Last month, NetEnt said in a preliminary results posting that it had expected to post lower-than-forecast results for the final three months of the year, and has now followed up on this by announcing the results in full.

Fourth-quarter revenue came in at SEK419m, up 4.7% on the corresponding period in the previous year, but operating profit slipped 3.9% to SEK150m and operating margin from 39% to 35.8%.

Per Eriksson, president and chief executive of NetEnt, said: “2017 was another eventful year with profitable growth for NetEnt, even though we had expected a much better outcome.

“Our strategy to grow on regulated markets remains in place and during 2017 we terminated deliveries of games to operators in Australia, Poland and Czechia, which affected revenues negatively by three percentage points in the fourth quarter.

“The global market for online gaming continues to grow, supported by digitalisation and the mobile development; we are challenging the traditional gaming industry with our digital business model and see that the migration to online from offline continues unabated.

“For 2018, we see conditions for profitable growth, supported by a large pipeline of new games, growing revenues from regulated markets, the mobile channel and new customers to be launched.

“I look forward to a new year with more game releases and product news than ever for NetEnt.”

Related article: NetEnt falls short of revenue, profit expectations in Q4

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