Cherry reduces losses as revenues jump 33%

Scandinavian-facing casino operator Cherry this morning posted a 33% hike in online revenues for the three months ended September 30, helping the company chip away at its ongoing operating loss.

Revenues from its digital operations increased by a third to SEK46.6m (£4m) in Q3 on the back of a 55% increase in deposits to SEK108.7m (£9.3m).

The performance helped reduce its losses for the quarter to SEK4.7m (£400,000), lower than the SEK5.2m loss Cherry reported in Q2, with the company now targeting a profit in Q4.

Online revenues for the nine months of the year have now reached SEK126.3m while losses have fallen to SEK14m, down 11% on the SEK15.2m loss recorded in the corresponding period last year.

Marketing expenditure continued to rise however, up 19% year-on-year to SEK21.1m for the nine months ended 30 September, and Cherry also noted high bonusing costs had negatively affected turnover and EBIT for the year.

Cherry chief executive Emil Sunvisson said the firm’s focus going forward was to “gradually be shifted from growth to profitability”, with the operator and supplier keeping one eye on prospective legislation in the firm’s native Sweden.

Sweden was issued infringement proceedings by the European Commission last month and the country has accelerated plans to liberalise its online gaming market, something which Sunvisson said was “inevitable”.

“We look forward to a gaming market that is open for everyone with the utmost importance placed on transparency and responsibility,” he said.

“We want to end the outdated monopoly in the market. We want to create additional jobs in Sweden and we want to compete in fair and equal market conditions,” Sunvisson added.

Cherry’s supplier arm Yggdrasil meanwhile remained “in start-up mode” and posted a SEK2.5m loss in the third quarter, higher than the SEK0.6m loss recorded in Q3 2013 despite eight new contracts being signed and five new operators launching Yggdrasil titles.