NET ENTERTAINMENT WARNS ON Q3 REVENUE EXPECTATIONS
19th September, 2012 at 04:34:18
The Swedish Krona has strengthened significantly against the Euro, impacting Net Entertainment's revenues negatively in the third quarter.
The Swedish online gambling software provider Net Entertainment has warned that its third quarter revenue expectations may be negatively impacted by currency fluctuations.
"Net Entertainment's revenues are affected by the development of the Swedish currency in relation to other currencies, mainly the Euro. The majority of revenues are invoiced in Euro. The revenues are reported in Euro which is then calculated to Swedish SEK for the Group's reporting, a statement from the company warned Wednesday.
"Since the end of the previous quarter the Swedish Krona has strengthened significantly towards the Euro which [may] affect Net Entertainment's revenues negatively in the third quarter."
"Furthermore the company's revenues have been negatively affected by delays of the launch of two large customers and the Olympics during July and August since the company's customers, the operators, have focused marketing spending towards sports betting.
"Due to the above factors the company estimates that the revenue growth for the third quarter compared to previous period 2011 is expected to be around 10% ( around 20% in Euros), which is lower than current market expectations."
The company added a warning that during the fourth quarter its depreciation level is expected to increase as the Live Casino project and developments related to the UK market entry are completed.
"As the Company grows and different authorities set increased requirements the need to further develop Net Entertainment's processes and systems increases, which increases costs during the fourth quarter," the statement notes.
Despite the warnings, Management at NetEnt says that long term the company is in a good position and estimates that the strategic efforts made on Live Casino, the UK entry and mobile games, in combination with slot games being available in Italy, will generate good revenues during 2013.
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