Global Gaming cuts losses in first half
Online gambling operator Global Gaming was able to reduce its losses during the first half of 2020, despite seeing its revenue decline 55.9% year-on-year.
The business also turned a small profit in the second quarter, which was hailed by chief executive Tobias Fagerlund as indicative of its strategy to restore the operator to financial health succeeding.
Overall revenue for the six months through to 30 June amounted to SEK129.7m (£11.4m/€12.6m/$14.9m), down from SEK294.3m in the same period last year.
Ninja Casino accounted for 81.9% of all revenue in the first half, though Global did not disclose exact figures, while the operator was also boosted by the launch with Boost Casino in certain markets during the latter part of the period.
The operator said that its Nordics operations were the main source of income, generating a total of SEK96.6m in revenue in the six months, followed by the rest of Europe on SEK18.7m and SEK14.3m from B2B collaborations.
Global is seemingly still feeling the impact of the Swedish Gaming Authority’s (Spelinspektionen) decision to revoke its subsidiary SafeEnt’s licences in June last year for commercial online gambling and betting. This was due to “serious deficiencies” in business practices, including failings related to responsible gambling and anti-money laundering measures, which forced Global from its largest market.
In January, the operator was granted permission by the Administrative Court of Appeal in Jönköping to launch a new appeal against the decision.
The business made a brief return to Sweden, through a white label agreement with Finnplay's Viral Interactive subsidiary, that saw the Nano Casino brand launched in July 2019. However, after Viral ceased offering white label solutions in March this year, bringing an end to the deal, Global sold its former partner the rights to Nano Casino in July.
Switching attention to costs, operating expenses in gaming activities fell 22.6% to SEK147.7m, while operating expenses were down 40.9% to SEK201.1m.
Marketing expenses were down 36.1% to SEK116.9m, while personnel costs were cut by 44.3% to SEK53.1m. Other external expenses were 52.2% lower at SEK22.6m and depreciation costs were also down by 53.2% to SEK3.7m.
However, despite spending less, the drop in revenue meant that Global posted an operating loss of SEK54.5m for the first half, though this was an improvement on SEK118.7m last year. An additional SEK100,000 in expenses meant pre-tax loss was SEK54.6m for the period.
After receiving SEK1.3m in tax benefits, Global posted a net loss of SEK53.3m, again an improvement on a loss of SEK122.0m at the same point last year.
“A year ago, we showed an ability to react quickly and forcefully in a very difficult situation,” Global chief executive Fagerlund (pictured) said. “We have step by step delivered what we set out to do and constantly adapted and adjusted our operational activities.
“No part of the organisation has remained unchanged; we have changed the technical platform, restructured the management, downsized the organisation by nearly two thirds which led to our cost base being completely different compared before.
“At the same time, in the midst of everything, we have very concentrated and successfully run our remaining business. Revenues from our current markets have grown by 26% during the first six months of the year compared with the first half of last year and by 35% when comparing the second quarters of the two years.”
In terms of Global’s performance in the second quarter, the operator was able to post a net profit, despite revenue falling 45.7% to SEK71.8m. Operating costs in gaming during the three months to 30 June were down 51.9% to SEK30.3m, with operating expenses almost halved to SEK40.4m.
This meant Global recorded an operating profit of SEK1.1m, compared to a loss of SEK11.1m last year. This was lowered to a pre-tax profit of SEK1.0m after other expenses, but as Global did not pay any tax in the quarter, this meant it posted SEK1.0m in net profit, up from a loss of SEK11.8m last year.
“We have been faithful to the strategy we agreed on and it is not without pride that I now state that we have exceeded our first sub-goal of being break-even during the first half of 2020,” Fagerlund said.
“Global Gaming is now ready to enter the next phase of the company's history. In the coming month, we will launch a comprehensive sports betting offer in our existing markets and brands, and in the third quarter we will complete what we previously communicated about launching in several new markets.”