NetEnt Fails To Meet 2017 Fiscal Forecasts
Posted on by Sean Williamson
iGaming giant NetEnt has reportedly failed to meet its initial financial expectations, despite the firm experiencing solid year-on-year growth across many of its key financial verticals last year.
The Stockholm-based developer has revealed revenues of SEK1.63 billion (€163.7m/$205.3m) earned during the twelve months ended on December 31, 2017. This represents a notable increase of 11.7% over the SEK1.46bn posted for the 2016 financial year. The company’s operating profits also grew by 9.5% to SEK587 million with a profit margin of more than 36%, while its profits after taxation also grew by 9.5% to SEK552 million.
Considering other financial indicators, NetEnt’s earnings per share both before and after dilution also grew from SEK2.10 to SEK2.30 per share. Additionally, the firm has also proposed a cash distribution of SEK2.25 per share to all of its shareholders – a figure identical to what was proposed at the end of 2016.
Firm’s Q4 Operating Profits Drop
In January, NetEnt noted in its preliminary results posting statement that it was expecting to reveal results that were lower than those forecast for the last three months of 2017. Now, the company has followed up on its original statement by unveiling its full financial results for the past year.
Q4 revenues for NetEnt reached SEK419 million, increasing by 4.7% over the same period of 2016. However, the firm’s operating profits dropped by 3.9% to just SEK150 million, while its operating margin also decreased from 39% to 35.8% during the period in review.
NetEnt President and CEO Per Eriksson has commented on the results, stating that 2017 was another eventful year full of growth and profitability for his firm. He did note, however, that he had expected a better fiscal outcome during the year.
CEO Predicts Profitable Growth
Eriksson noted that his firm’s strategy to expand into regulated markets is still in place, revealing that in 2017, the company ended its supply of casino games to operators in Poland, Czech, and Austria. According to the CEO, this negatively impacted NetEnt’s revenues by three percentage points in Q4.
He further noted that the global iGaming market continues to grow through ‘digitalisation and mobile development, and that in 2018, his company sees conditions for plenty of profitable growth. Eriksson noted that this growth will be supported by multiple new game launches, revenues from regulated markets, and the growing popularity of mobile gaming options.