Swedish gaming operator Cherry AB reported a profit of SEK188 million ($20.5 million) for the third quarter of 2018, a significant improvement from the SEK42 million ($4.6 million) posted in the third quarter of 2017.
In its press release, the company also reported third-quarter revenue of SEK899 million ($98.1 million), a 58% increase compared to July to September 2017. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 130%, to SEK258 million ($28.2 million).
“The positive trend in sales and gaming volumes continued throughout the third quarter… Cherry’s strategy of maintaining proximity to all parts of the gaming market and end customers is crucial to our continued growth,” Cherry Acting CEO Gunnar Lind said.
In July, subsidiary Cherry Online Polska was granted a sports betting license for the Polish market, with the brand PZBuk being launched in October. Also in October, Cherry agreed to acquire the remaining 5% of shares in subsidiary Game Lounge Ltd.
During the quarter, another subsidiary, gaming solutions supplier Yggdrasil, signed agreements with Finland’s gaming operators Paf and Veikkaus, and Sweden’s Svenska Spel and ATG. Also, during September, subsidiary ComeOn applied for eight Sweding gaming licenses.
“ComeOn has good opportunities to strengthen its position in the Swedish market following the re-regulation to be introduced next year,” Lind said, referring to the recent legislation passed in the country that opened it to international gambling operators.
He added that “in many ways, Sweden is the most important market for us and for several European gaming companies, many of which have Swedish roots in the form of founders and entrepreneurs with abundant initiative… The Swedish market remains highly important for Cherry, while we are also seeing significant growth in other markets and our strategy continues to be to expand into markets where we see opportunities for good returns.”
Earnings before interest and taxes (EBIT) was positively affected, according to the company, by the valuation of a previously owned holding in its Highlight Games, of SEK57 million ($6.2 million).
For the first three quarters of the year, profit amounted to SEK367 million ($40 million), up from the same period last year, when it posted profit of 93 million ($10.2 million). Revenue rose 42% year on year, to SEK2.33 billion ($254.6 million). EBITDA increased 114% to SEK615 million ($67.1 million).