bwin.party experienced a decline of first-quarter revenues
Online gaming provider bwin.party digital entertainment has released an interim management statement regarding its financial performance over the three months to the end of March showing that the firm experienced a 17 percent year-on-year drop in total revenues to €180.2 million ($231.8 million).
Gibraltar-based bwin.party stated that the fall in first-quarter revenues was due to ‘the introduction of a five percent turnover tax on sportsbetting in Germany’ along with a ‘significant reduction in acquisition marketing in several dotcom countries’ and ‘lower than expected’ poker and casino player activity ‘following the dotcom migration’.
The operator declared that ‘clean’ first-quarter earnings before interest, tax, depreciation and amortisation were ‘in line’ with its expectations due to cost savings generated on the back of its ‘volume-to-value’ approach while it expects to realise €70 million ($90.1 million) in total savings this year followed by further economies in 2014 and 2015.
“The drop in revenues in the first quarter reflects our tactical shift from ‘volume’ to ‘value’ that we announced at the time of the full-year results as well as lower than expected player activity in poker and casino following the dotcom migration in December,” said Norbert Teufelberger, Chief Executive Officer for bwin.party.
“As previously announced, our shift in tactics will see us optimise the shape and size of our business, a process that is expected to reduce total revenues in 2013 by up to ten percent compared with 2012. However, our programme to reduce costs is on-track and we remain comfortable with our previous guidance on clean earnings before interest, tax, depreciation and amortisation margins having identified total savings of approximately €70 million per annum to be delivered in 2013 with more to come in 2014 and 2015.
“While seasonality and the absence of a major football tournament this year mean that revenue trends are unlikely to improve until the second half of the year, a series of new product launches and the anticipated opening of poker and casino in New Jersey coupled with a detailed programme of cost savings and a greater focus on regulated markets mean we remain confident about the group’s prospects.”