bwin.party sees recovery after weak third quarter

Bwin.party digital entertainment, the world's largest listed online gaming company, saw revenues slip in the third quarter with several factors to blame, including a better regulation and the weak economic environment in Europe.

Pro forma revenue in the three months to September 30th totalled €184.4m, down 5% from the €201.1m registered in the third quarter of 2011, with average daily revenue down 8% year-on-year.

The group said that third-quarter trading was heavily affected by the introduction of a 5% turnover tax on sports better in Germany, a poor run of sporting results in European football and a decline in poker, compounded by a "challenging macroeconomic backdrop in southern Europe".

A number of bwin.party's key performance indicators (KPIs) declined during the period: active player days fell 17% year-on-year (y/y) from 20.3m to 16.9m, down 20% quarter-on-quarter (q/q); daily average players also slumped 17% y/y from 220,700 to 183,700, -21% q/q; unique active players and real money sign-ups also decreased significantly.

Pick-up in fourth-quarter trading

Nevertheless, the group has seen a significant turnaround in the final quarter with average net ail revenues up an impressive 19% compared with the third quarter. Co-Chief Executive Officers Jim Ryan and Norbert Teufelberger said: "we are encouraged by a marked recovery in trading across all products since September 30th."

This recovery has been driven by a strong recovery in sports better and to a lesser extent poker and bingo.

Ryan and Tuefelberger said that the macroeconomic outlook across most of Europe remains fragile, with consumer spending under pressure, particularly in southern European markets.

"While the headwinds associated with the transition to regulated markets and the impact of gaming taxes can be expected to continue, given the completion of our technology integration and the next evolution of each of our core products due in 2013, the board remains confident about the full year result."