The first six months of 2016 saw revenues increase by 31.7%, with operating profit increasing by 43.6%. The company signed agreements with 21 new customers and casinos were launched by 14 new customers. NetEnt’s profit after tax during this period was SEK 235.2 million, which represents an increase of 46.3%.
Whilst those figures for the first six months are very impressive, when one looks closer it is clear that the second quarter of 2016 was particularly special. In the second quarter alone, NetEnt games went live in New Jersey with Tropicana, the company won three awards at the 2016 EGR B2B Awards ceremony in London and it also signed a customer agreement with the Rank Group.
All of that activity helped revenue for the second quarter of 2016 to increase by 29.8%, with operating profit increasing by 32.1% and profit after tax weighing in at SEK 113.5 million, which was up 31.1%.
The decision recently made by the UK to leave the European Union is one that will impact NetEnt just as it will many other global companies, but right now the impact is minimal. ‘Great Britain continues to be one of our most important markets, where we keep seeing strong growth,’ wrote Per Eriksson, who is President and CEO of the company.
‘In June, we signed a license agreement with Rank Group, one of the largest gaming operators in Europe with a strong market position in the UK. It is difficult to assess how online gaming demand will be affected by Brexit going forward. In the short term, we see mainly currency effects as we invoice most of our UK customers in British pounds. However, since the UK referendum, weakness in the Swedish krona against the euro has compensated for the weaker pound.’
As far as the general outlook is concerned, Eriksson was deservedly upbeat. ‘The second quarter featured strong demand for our products and strong growth,’ he wrote. ‘Revenues increased by 30 percent and operating profit rose by 32 percent. The operating margin was 34.8 percent, which was an improvement compared to the previous year. I am optimistic going into the second half of 2016 – the conditions look good for continued strong growth.’