Rising costs prompt 32% fall in Unibet profits
Stockholm-listed operator posts double-digit EBITDA decline in Q1 2015 as revenues stagnate
Unibet’s Q1 profits fell by 32% year-on-year following an increase in marketing costs and a hit from currency fluctuations on gross winnings revenue (GWR), the company announced this morning.
EBITDA for the three months ended 31 March 2015 was £14.4m, down from £21.3m in the same period in 2014, while GWR decreased slightly from £76.5m to £76.1m, although this was affected by fluctuations in currency rates and revenues were up 15% on constant currency basis.
However the fall in profits was blamed on growing marketing costs, up 18% year-on-year to £18.9m, while cost of sales also increased significantly from £19.4m to £26.6m.
Sportsbook enjoyed the strongest growth at the Stockholm-listed firm with GWR increasing by 8% year-on-year during the quarter to £35.5m, despite a lower sports betting margin of 7.3% after free bets.
Sports betting overtook the operator’s casino vertical in revenue terms, which declined 1% year-on-year to £34.9m, while the decline of Unibet’s standalone poker business slowed with GWR falling marginally from £2.4m to £2.2m.
CEO Henrik Tjärnström said he was pleased with the company’s performance in the quarter and highlighted the impact of movements in currency exchange rates to the top-line.
“Unibet’s organic growth continued to develop strongly in the first quarter, with an increase of gross winnings revenue in constant currency of more than 15%, against strong comparatives,” Tjärnström said.
“This is again significantly higher growth than the overall market and indicates that we are continuing to take market shares across the board,” he added.
The company also reported regulated GWR of 28%, with revenues from its core and unregulated Nordic region falling from £38.4m to £34.4m. Mobile revenues were up and contributed 48% of total GWR.
During the quarter Unibet also completed the acquisition of the remaining part of real-money social gambling business Bonza Gaming which has since been integrated into the Unibet business.
Bonza Gaming was formed in December 2012 following a joint venture between social casino start-up Plumbee and egaming operator Sportingbet, which later sold its 50% stake to Unibet.
For the period up to 26 April, Unibet revealed sports betting turnover was up 22% year-on-year in addition to a small increase in daily average GWR.
The firm’s share price was SEK504 on the Stockholm Stock Exchange at the time of writing.