bwin.party hit by higher gaming taxes, revenue to fall in 2013
Online gaming group bwin.party digital entertainment reported a sharp fall in profits in 2012 owing to an increase in gaming taxes and lower sales, and said that the revenues are expected to decline further in 2013.
Online gaming group bwin.party digital entertainment reported a sharp fall in profits in 2012 owing to an increase in gaming taxes and lower sales, and said that the revenues are expected to decline further in 2013.
Pro forma revenue totalled €801.6m in the 12 months to December 31st, down 2.0% from €816m in 2011.
The Sports Betting and Casino & Games divisions registered growth during the period, but this was offset by a flat performance in Bingo and sharp decline in Poker.
The performance in Poker reflected "challenging market conditions" in several markets particularly in southern Europe, bwin.party said, as the industry was hit by ring-fencing of certain newly regulated markets and the impact of gaming taxes.
Clean earnings before interest, tax, depreciation and amortisation fell 17% year-on-year from €199.3m to 164.9m to reflect flat revenue, increased gaming taxes and compliance costs.
The company was hit by the introduction of a 5.0% turnover tax on sports betting in its core market of Germany in July, though it said that the majority was passed on to customers.
bwin.party registered a loss before tax of €23.5m for 2012, significantly lower than the €422.9m loss made in 2011, mainly due to a sharp decrease in impairment losses.
Nevertheless, the final dividend was raised by 10% to 1.72p per share, bringing the total payout for 2012 to 3.44p per share, up from 3.12p previously.
Revenues to slip in 2013bwin.party said that 2013 revenue is now forecast to be slightly lower than current market estimates after some "user experience issues" in January and December following the dotcom migration (to a single technology platform) in December 2012.
The company also said that current trading has been impacted by decisions to increase its focus on nationally regulated markets and on high-value customers. Some 35% of gaming revenues came from nationally regulated markets in December 2012 and 38% of gaming revenues were subject to gaming taxes, up from 26% and 26% the year before, respectively.
As such, average gross daily revenue in the year to date has fallen by 7.0% against the fourth quarter.
Chief Executive Officer Norbert Teufelberger said: "The migration problems have now stabilised and while the user experience issues coupled with the actions taken to-date mean that 2013 total revenue is expected to be lower than current market estimates, associated cost savings mean that the board remains confident about the full year result."