Cherry reveals ongoing financial growth in third quarter

8 November 2017

Cherry AB has reported widespread year-on-year growth across a number of key financials during the three months through to September 30.

Revenue in the third quarter amounted to SEK567m (€58.3m/$67.6m), up by 165% on SEK214m in the same period last year, with organic revenue growth hitting 30%.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rocketed by 263% year-on-year to SEK112m, with a margin of 20%, while profit for the third quarter also jumped from SEK31m to SEK42m.

However, earnings per share before and after dilution were down from SEK0.27 and SEK0.27 to 0.22 and 0.27, respectively.

For the year-to-date, to the end of September, revenue came in at SEK1.6bn, up 182% on the SEK583m that was posted at the same point last year.

EBITDA jumped 304% year-on-year to SEK288m, with a higher margin of 17%, while profit was also up from SEK57m to SEK93m.

Earnings per share both before and after dilution remained relatively level at SEK0.49.

Anders Holmgren, chief executive of Cherry AB, said: “Cherry’s operations continue to develop strongly; as the industry’s most complete gaming company, our offering has a broad base and we are able to respond quickly when we perceive opportunities.

“In the third quarter, we unfortunately saw our largest business area lose momentum, although the new management, with its extensive experience of the industry, has taken measures to increase both growth and profitability.

“Cherry’s largest business area, online gaming, which includes the ComeOn operations, reported revenue growth of 214%, from SEK143m SEK448m and an EBITDA margin of 15%.

“The integration of the online gaming operations within ComeOn continued to affect growth and profitability negatively in the third quarter; we have continuously reviewed the integration process within the business area and can affirm that the lion’s share has been completed.”

Holmgren also spoke about a number of management changes at the company and how he expects this to help support growth moving forward.

“To intensify efforts to achieve our objectives, several of the people who have been with ComeOn from the outset have been appointed to lead the operations,” Holmgren said.

“The company’s chairman, Tomas Johansson, will be the acting managing director while we recruit a new managing director.

“Together with the new company management, appointed in late October, he will focus on the market offer, cost reduction and growth.”

Related article: Cherry reveals significant revenue growth in Q2, H1