Betsson reported revenue of €186.3m (£158.9m/$189.5m) on its second quarter results, which saw Latin America become its biggest market – while that revenues in Western Europe have fallen by almost 40%.
Pontus Lindwall, CEO of Betsson [pictured above] said the company saw progress in most areas throughout the quarter and praised its progress in sports betting.
“Betsson’s second quarter was characterized by continued good growth with record revenues and new investments to support our expansion,” Lindwall said. “The group’s organic growth was 13%, mainly driven by Latin America, Central and Eastern Europe and Central Asia, where we see long-term growth potential as these markets still have a low market share. online games.”
“The sports betting business showed strong development during the quarter – gross revenue increased by 20% and margin was 8.3% (8.5%) – leading to record revenues. “
Latin America is now Betsson’s biggest market. In the second quarter, it achieved a turnover of 45.7 million euros, up sharply by 86.2% year-on-year. Revenue from Central and Eastern Europe and Central Asia increased by 23.4% to €61.1 million.
Betsson said these were record earnings for both regions.
Elsewhere, sales in the Nordic countries fell by 5.7% to €51.2 million. Betsson attributed the decline to the 2020 European Championship taking place during the second quarter of 2021, providing “favorable results” and “high levels of activity”.
The drop in revenue in Western Europe to €24.8 million was partly attributed to Betsson withdrawing from the Dutch market, to comply with licensing measures outlined by the Dutch regulator, meaning there is no had no revenue from this segment for the quarter.
Referring to Germany, Lindwall said the country’s market is “marked by low levels of channeling, due to extensive restrictions, high taxes and an unclear licensing process.” Lindwall said that for this reason, Betsson only applied for one online casino license in Germany, through its subsidiary Zecure Gaming Ltd.
Overall revenue for the quarter increased by 7.8% compared to the second quarter of 2021. Casino revenue accounted for 122.2 million euros, up 1.6 million euros per year, while sports betting revenues increased by 22.4% and accounted for the remaining 61.6 million euros.
Total cost of services for the year was €67.5m – more than €10m more than Q2 2021 – and brought gross margin to €118.8m, a year-on-year increase by 2.6%.
Total operating expenses for the quarter amounted to €89.6 million, leaving operating profit at €29.2 million. This is 22.7% less than in the second quarter of 2021.
Marketing incurred the highest expenses throughout the quarter, with a total of €30.5 million, followed by personnel costs and other external expenses with €29.8 million and €25.8 million respectively.
After financial income and expenses, which add €2.2 million to the total, and tax, which recorded a loss of €2.8 million, net profit amounted to €28.6 million, down 14 .1% over one year.
Cash flow from operating activities amounted to €37.8 million, including €1.1 million from changes in working capital requirements. This was 32.8% less than the previous year – however, Betsson said this was due to a positive effect of VAT collection in the second quarter of 2021.
Net debt is -€19.8m, which now puts Betsson in a net cash position, unlike Q2 2021 where net debt was €14.6m.
Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter was €39.3 million, down 16% year-on-year.
At the same time, cash flow from investing activities resulted in a loss of €14.8 million. These were mainly investments in Betsson and earn-outs for Latin American sportsbook Inkabet, which Betsson acquired last year.
Sports betting revenue also hit a record high, totaling €991.3 million, an annual increase of 20.5%. And this despite the fact that several high profile sporting events took place in the second quarter of 2021.
Year-to-date, Betsson’s revenue was €356.4 million, up 7.9% year-on-year. Gross margin was €225.8 million, down 3.5%. Total EBITDA amounted to €72.7 million, a loss of 11.6%.
Total net income also fell by 13.4% to €49.4 million. Operating income for the year currently stands at €52.8 million, while operating expenses amount to €173 million.
The number of registered customers edged closer to 25 million in Q2, while the number of active customers fell 0.7% to 1.2 million from the prior quarter.
In June, Betsson issued a number of bonds totaling 90 million euros under a three-year contract, at an interest rate of 6.5%. The bonds will mature in 2025.