Malta-licensed online gambling operator Unibet says profit fell nearly one-third in Q1 due to a combination of increased marketing costs and unfavorable currency exchange rates.
Unibet reported profit before tax falling 32% to £11.3m in the three months ending March 31, while earnings were down a similar percentage to £14.4m. Revenue was essentially flat at £76.1m although the company says that if those pesky currency fluctuations were eliminated, revenue would have risen over 15% despite “strong comparatives” with the same period last year.
Unibet acknowledged that its 18% rise in marketing costs – spent primarily in its UK and Australian markets – had depressed Q1 margins but assured investors that the benefits of these promos were already being felt. The company said active customer ranks had risen nearly 11% to 612k, an all-time high that surpassed the levels seen during the 2014 FIFA World Cup, while customer deposits were up 12% (25% in constant currency).
Sports betting was Unibet’s star performer in Q1, with revenue up 8% to £35.5m despite free bet offers eating away at margins. Betting turnover rose 17% (30% in constant currency) and the vertical’s share of the overall revenue pie rose eight points to 47%. In-play wagers accounted for 52.4% of total bets, up from 45.1% a year ago.
The rest of Unibet’s verticals weren’t so fortunate, with casino revenue down 1% to £34.9m, poker down 8% to £2.2m and ‘other’ revenue down 41% to £3.5m. Mobile channels accounted for 48% of total revenue.
Unibet says 28% of its Q1 revenue came from regulated markets. Revenue from Unibet’s core Nordic markets fell four points to 45%, while Western Europe rose six points to 38%. Other European markets slipped one point to 8% while ‘other’ regions fell by half to 2%.
For the first 26 days of April, Unibet said sports turnover was up 22% and overall revenue was up 4% from Q1 2015.
KAMBI OPERATOR TURNOVER UP 47%
Meanwhile, Unibet’s former B2B division Kambi Sports Solutions saw its revenue rise 29% to €10m in Q1. Kambi-licensed operators – which include Unibet, 888 and 32Red – reported a 47% gain in combined turnover thanks to a significant increase in the number of live bets on offer. Kambi’s operating profit came to €800k on an 8% margin, while profit after tax hit €600k.
The quarter saw Kambi upgrade its Italian market service in preparation for its expected launch in that market later this year. Kambi also inked a long-term extension of its deal with Finnish gambling operator Paf. Since the quarter ended, Kambi has received its new UK Gambling Commission license.