Danske Spil sees H1 revenue fall after CEGO sale

4 September 2019

Danske Spil has put a slight year-on-year decline in gross gaming income in the first half down to its decision to divest its stake in games development studio CEGO, while rising costs saw the Danish state-controlled operator's net profit decline.

Gross gaming revenue for the six months to 30 June, 2019 amounted to DKK2.49bn (£301.3m/€333.9m/$367.6m), down from DKK2.54m in the same period last year.

Danske Spil said that this was primarily due to the sale of its stake in CEGO to the studio’s original owners and the private equity fund Via Equity III. This took place before the end of June, with Danske Spil offloading the 60% stake it acquired in 2014 for an undisclosed sum.

In terms of continuing operations, income from Danske Lotteri Spil lottery division slipped from DKK1.37bn to DKK1.24bn, but remains the main source of income for the business.

Income from the Danske Licens Spil online gaming division climbed from DKK977m to DKK1.06bn, while the gaming hall and slot manufacturer business Elite Gaming provided an additional DKK188.9m in revenue, flat year-on-year.

However, the operator did see revenue from its Swush fantasy sports business fall from DKK8.5m to DKK3.9m.

Reflecting on the results, Danske Spil’s chief executive, Susanne Mørch Koch, said she was pleased with the performance in H1, adding that the operator remains committed to enhancing its digital offering. Koch also pointed to the acquisition of Tivoli Casino, the online casino named for the Copenhagen amusement park, as a key highlight in the period.

“We have succeeded in maintaining the healthy operation of the company and at the same time continuing and intensifying our digital development, which further strengthens Danske Spil’s position with our customers and helps to grow Danske Spil's market share,” Koch said.

“At the same time, we have completed two large transactions and thus strengthened our core business. Danske Spil took over Tivoli Casino and sold its share of CEGO; a sale that took place on terms that were very satisfactory for Danske Spil and our owners."

Spending at Danke Spil was down from DKK1.78bn in the first half of 2018 to DKK1.67bn this year. Personnel costs were up from DKK136.7m to DKK148.9m, while depreciation and write-downs climbed from DKK81.5m to DKK126.1m

Danske Spil was able to make savings elsewhere, with other external costs cut from DKK399.7m to DKK359.9m.

However, despite reduced spending overall, profit before tax was down from DKK1.16bn to DKK1.05bn, while net profit for the period slipped from DKK928.0m to DKK872.8m.

The opeartor's chairman Peter Gæmelke described the results as "quite satisfactory".

"We have succeeded in having a solid operation while also making significant changes in the way we do things in Danske Spil," he explained. "We on the board would like to emphasise that the business has continued its digital transformation, while at the same time focusing on our core business, and remaining the best and most available gaming company in Denmark.

"I am pleased that we have also taken significant steps in 2019 to ensure that we live up to these goals.”