BUSINESS

NetEnt Q3 profits up 22% as company plans Canadian regulated market entry

TAGs: BCLC, Canada, netent, playnow.com

Swedish online gambling technology supplier NetEnt says profits rose more than one-fifth in Q3, and would have risen even higher except for weakness in the UK pound.

NetEnt Q3 profits up 22% as company plans Canadian regulated market entryFigures released Friday show NetEnt’s revenue in the three months ending September 30 rising 27.7% to SEK 357m (US $40.1m). The company says revenue would have been around 3% higher had the weak British pound not allowed so many other currencies to kick sand it its face.

Q3’s operating profit was up 23% to SEK 129m and profit after tax gained 22.2% to SEK 119m. NetEnt’s operating margin came in at an impressive 36.2%. Mobile revenue increased 83% year-on-year, accounting for 40% of all Q3 revenue.

For the first nine months of 2016, NetEnt’s revenue is up nearly one-third to SEK 1.05b, operating profit up nearly 36% to SEK 380m and profits up 37.2% to SEK 354.5m. Operating margin held steady at 36%.

Q3 was a busy quarter for the company, signing 11 new customer agreements and launching online casinos for eight new customers, including Rank Group and several operators in NetEnt’s new market Romania. The company also rolled out its new mobile live casino.

NetEnt also shed a little light on its recent moves to lessen its exposure to Canada’s online grey market. This spring, some NetEnt licensees began informing their Canadian customers that they would no longer be able to access NetEnt products. NetEnt reportedly expanded this restriction to all Canadian-facing licensees earlier this month.

NetEnt CEO Per Eriksson (pictured) offered an explanation for this Canadian crackdown, using the Q3 report to announce that the company “will apply for a license in the province of British Columbia in the fourth quarter.” In other words, customers of PlayNow.com, the online gambling site of the British Columbia Lottery Corporation, will likely be playing NetEnt slots early in 2017.

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