Italian operator and supplier Newgioco Group expects to see revenue for the second quarter of 2020 to fall by up to 52.7%, following the disruption caused to the business by the novel coronavirus (Covid-19) pandemic.
Due to the lack of sporting events during the Covid-19 lockdown, Newgioco said it experienced an “unprecedented decrease” in overall revenue for the period from 15 March to 30 June.
The company expects therefore revenue for the three months ending June 30 2020 to be between $4.3m (£3.28m/€3.65m) and $5.3m, a year-on-year decline ranging from 41.7% up to 52.7% compared to the $9.1m generated in the prior year.
Revenue for the six months ending 30 June, 2020, meanwhile, is expected to come in between $14.5m and $15.5m, down between 15.8% and 21.2% from $18.4m in the first half of 2019.
The company expects the decrease in revenue to be offset by a decrease in selling expenses for the three months ending June 30, which it expects to be between $3.5m and $4.5m, down from $6.3m for the same period in 2019.
Selling expenses are expected to be between $9.7m and $10.7m for the six months ending June 30 2020, again a decline from the $13.7m of costs incurred in the six month period in 2019.
These preliminary estimates are the responsibility of the company’s management, and have not been audited or reviewed by the company’s public accounting firm, Newgioco noted.
The decrease is expected despite Newgioco’s report of a return to profit in the first quarter of 2020. The company announced in July its intention to raise net proceeds of $9.2m through a share offering, in order to repay outstanding debts and accumulate working capital.