In April, Scout Gaming launched a daily fantasy sports product in Brazil in partnership with Cartola Express.
Following the quarter’s end, Scout completed a restructuring process. The process saw Scout divest its Scout Gaming AS Norwegian subsidiary to its management.
Its employee headcount was also reduced. At the time Scout did not disclose how many staff remained, but CEO Niklas Jönsson confirmed in the Q2 report that this number is 35.
“After the end of the quarter the group announced the reorganisation which has resulted in a reduction in employees to 35 and retaining a partnership with the Norwegian company which has been divested,” said Jönsson.
“The financial outcome from the reorganisation will be fully visible from Q4 this year.”
“Major reorganisation” at Scout
Scout has underwent a number of significant changes since the beginning of 2022. In March of that year, former CEO Andreas Ternström instigated a cost review off the back of Scout’s Q4 2021 results.
Following Ternström’s departure during Q2 2022, chairman Niklas Braathen noted that a “major reorganisation and transformation” of Scout lay ahead.
In the Q2 2023 report, Jönsson highlighted the events of the last 18 months, stating that management has a positive outlook on future operations.
“During the last 18 months the group has gone through a lot of changes,” he said. “Me and the rest of management are now at the point of that the work will start to pay off and we move to a more stable and positive future.”
Lessened operating expenses don’t aid net loss
Expenses lessened year-on-year during the second quarter. Personnel expenses totalled SEK8.7m, compared to SEK12.1m in Q2 2022.
Other external expenses fell by SEK8.8m to SEK6.6m. Depreciation, amortisation and impairment of property, plant and equipment (PPE) was SEK43,000.
Total operating expenses for the quarter hit SEK15.5m, an improvement of SEK12.2m. This brought the total operating loss to SEK6.0m.
Investments in group companies incurred a SEK42m cost. Financial items – which included the sale of Scout’s Norwegian business – totalled SEK10.8m.
In total, the net loss for the period was SEK37.3m, SEK13.2m more than the SEK24.1m incurred in Q2 2022.
Earnings before interest, tax, depreciation and amortisation (EBITDA) was SEK6.0m.
Half-year performance steady
Turning to Scout’s half-year performance, total revenue was SEK16.0m, up by 46.5%.
Total operating expenses for the six months came to SEK31.9m, a decrease of 44.9%. Personnel expenses accounted for more than half of the overall operating expenses, at SEK18.3m. Other external expenses were SEK13.4m, while depreciation, amortisation and impairment of PPE was SEK93,000.
After considering the operating expenses, the total operating loss for the period was SEK15.9m. This was further affected by SEK42.1m in costs in investments in group companies. However, this was offset in part by SEK27.7m in financial items.
In total, the loss for the six months was SEK30.2m, an improvement of SEK14.8m.
EBITDA for the half-year was SEK15.8m.