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Sports resumption drives Kambi to record revenue in Q3

| By Robert Fletcher
Kambi Group said the resumption of sporting events after the novel coronavirus (Covid-19) shutdown helped it set a new revenue record in its third quarter.
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Revenue in the three months through to 30 September amounted to €28.1m (£25.3m/$33.3m), representing an increase of 22.2% on €23.0m in the same period last year.

Kambi the third quarter was particularly busy for sports around the world, with US and European leagues completing seasons disrupted by Covid-19.

This helped overall operator turnover grow 62.0% year-on-year, with average operator trading margin for the period standing at 7.2%.

Kambi also noted that revenue derived from locally regulated markets in Q3 was 80.0%, up from 73.0% in the same quarter last year.

Q3 saw Kambi expand its portfolio of partners, having signed new sports betting deals with Churchill Downs Incorporated (CDI) in the US, an agreement that has seen its BetAmerica brand launch in Colorado and Michigan, with more states to follow in Q4 and beyond.

Kambi also completed 14 US on-property launches in Q4, spread across New Jersey, Michigan, Colorado, Illinois and New Hampshire, involving CDI, Four Winds Casinos, DraftKings, Parx Casino, PNG and Rush Street Interactive (RSI).

Q4 also saw Kambo sign an extended deal with LeoVegas, through which it was able to relaunch two brands, BetUK and 21.co.uk, in Great Britain.

In terms of geographical performance, Europe remained Kambi’s core market, though the Americas gained significant ground in Q3, now representing 43% of all gross gaming revenue, up from 28% in Q2.

“The difference between Q2 and Q3 couldn’t have been starker and underlines the ability of the business to quickly and efficiently respond not only to the lockdown situation, but also ensuring resources were in place for when sports returned,” Kambi chief executive Kristian Nylén said.

“It’s reassuring for our partners to experience the capability and inherent flexibility Kambi has to adapt and thrive under testing conditions and we are confident in our ability to handle any potential future impacts that may arise from the virus.”

Looking at spending in the quarter, total operating expenses stood at €21.5m, up 9.7% from €19.6m in the same period last year. This left an operating profit of €6.5m, an increase of 91.2% on Q3 of 2019.

When accounting for €155,000 in finance expenses, Kambi posted a €6.4m profit before tax, compared to €3.3m last year. Kambi paid €1.3m in tax in Q3, meaning it ended the quarter with a net profit of €5.1m, up 121.7% on the previous year.

As to how this impacted Kambi’s year-to-date performance, revenue for the nine months to the end of September was €70.7m, an increase of 7.8% on the same point last year.

Operating costs were 6.5% higher at €60.7m, but revenue growth meant that operating profit was up 16.3% to €10.0m, while profit before tax also climbed 18.5% to €9.6m.

After paying €2.2m in tax, Kambi had €6.8m in profit, but when also accounting for €1.2m in currency translation arrangements, this meant that comprehensive profit was €5.6m, up 12.0% year-on-year.

Kambi also noted a number of major events that happened after the end of Q3, including signed a deal with the Belgian National Lottery and also launching in the US state of Tennessee.

“As we near the end of 2020, the cautious optimism of earlier in the year has been replaced with growing confidence, as we finish the year in great shape,” Nylén said.

“Looking ahead, having successfully come through our toughest challenge, more exciting opportunities await us.”

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