Central and Eastern European gaming operator Fortuna Entertainment Group (FEG) saw its profit increase tenfold in the first quarter of 2018 following its year of acquisitions.
Figures released this week show the Czech Republic-based FEG’s revenue nearly tripling year-on-year to €77m in the three months ending March 31, while earnings shot up 665.5% to €22.7m and net profit soared 923.6% to €14m.
FEG CEO Per Widerström credited the growth to “operational excellence, new platforms and regional expansion,” the latter category having received a serious boost through a series of acquisitions that firmly established FEG in Romania and Croatia, building on its existing presence in the Czech Republic, Slovakia and Poland.
The gains weren’t entirely due to acquisitions, as organic revenue (excluding Hattrick Sports and Fortuna Romania) was up 63.2% to €40.2m while organic earnings more than tripled to €12.3m.
FEG’s mainstay Czech operations reported sports betting stakes rising “at a double-digit rate,” while online casino spending “more than quadrupled.” Gross win from wagering also enjoyed double-digit growth, while online casino win “more than tripled.”
In Slovakia, overall betting stakes rose double-digits as online gains offset slight retail declines, but both retail and online gross win were in positive territory.
In Poland, where FEG’s local subsidiary holds a one-third share of the overall betting market, sports betting stakes grew at a “triple-digit rate, primarily driven by online.” Online gross win grew triple-digits, while retail win made do with double-digit growth.
The Hattrick Sports Group accounted for 27.3% of FEG’s overall betting stakes, with Hattrick Romania contributing 6.7% and the Romania-facing online operations of Hattrick Croatia adding 20.6%. The Fortuna Romania division claimed a 12.8% share of overall stakes.
On May 2, FEG delisted from the Prime Market of the Prague Stock Exchange, making good on its threats to take the company private in order to rid itself of having to air its financial laundry in public every three months. So future FEG earnings reports will likely consist of a single-line statement saying ‘We’re rich, bitches!’ or the equivalent.
Czech media recently released gambling market statistics for 2017, which showed Czech punters spending CZK39.8b (US$1.82b) on their gambling activity of choice, CZK500m more than in 2016. One-third of this sum was bet online, up from just 3% in 2009. The government’s share of this bounty topped CZK12b, up from CZK10.5b in 2016, thanks to 2016’s dramatic tax hikes.