Czech sports betting operator Fortuna Entertainment Group (FEG) says its 2015 numbers benefited from a surge in online and mobile wagering.
Thursday saw Fortuna, which offers fixed-odds betting services in the Czech Republic, Slovakia and Poland, release a preliminary report on its 2015 performance, which showed a net profit of €19.5m, up 22.5% from 2014. However, profit was flat if you subtract the one-off impact of a value-added tax claim in Poland in 2014.
Overall fixed-odds betting stakes were up 26% to €847.7m while betting revenue improved 11% to €138.7m. Fortuna’s lottery operations reported stakes rising 17.8% to €19.7m while lottery revenue increased 15.5% to €8.7m. Betting accounted for all but €900k of Fortuna’s overall earnings of €27.2m.
Online betting revenue was up 26.4% to €84.7m, driven by strong gains in mobile and in-play betting activity, while retail betting revenue declined 7% to €54m. Fortuna credited the online improvements to the abolishment of an online handling fee in Slovakia as well as Poland’s controversial decision to start prosecuting bettors who dare wager with sites not holding a Polish license.
The Czech Republic remains Fortuna’s key market, accounting for 54.5% of betting stakes, while Slovakia placed second with 30.7% and Poland contributed 12.5%. Fortuna’s online momentum was underscored by declines in its number of retail shops, which fell 8% in the Czech Republic, 6.8% in Slovakia and 1.2% in Poland.
Fortuna CEO Per Widerstrom hailed his company’s 2015 performance, which he noted had come despite the absence of a major football tournament like the 2014 FIFA World Cup. Fortuna expects a healthy bump from the UEFA Euro 2016 tourney, as all three countries in which Fortuna operates have qualified for the competition.
Sports betting stakes are expected to top €1b in 2016 but earnings could fall between 10% and 15% due to the Czech Republic’s new betting tax and Fortuna’s ongoing investment in its new sports betting and gambling platform.
As a result, Fortuna says it will issue no dividends in either 2016 or 2017. Fortuna warned investors last March that it was considering a temporary halt to dividend payments – which had been running at 70% to 100% of its profits – in order to conserve cash for “investments into future growth.” Fortuna says it will revisit its dividend policy at the end of 2017.