SBC News 'Challenging Period' - Betsson H1 earnings hit by currency fluctuations & lower betting margins

‘Challenging Period’ – Betsson H1 earnings hit by currency fluctuations & lower betting margins

UlrikThe governance of Stockholm-listed European sports betting operator Betsson AB has stated that H1 2016 has been a challenging period in which the business has faced various obstacles. 

Presenting its H1 trading results (six month period ending 30 June), Betsson detailed that although group revenues had hit SEK 1.93 billion (13% up on H1 2015: 1.7billion), its performance had been impacted by severe exchange rate fluctuations and lower operating margins.

H1 2016 operating income would fall by 9.5% to SEK 408 million (H1 2015: SEK 451 million). The company would see a decline throughout its earnings metrics, reporting a Net income of SEK 380 million (Q1 2015: SEK 425 million).

In June, Betsson governance had issued a profit warning to investors stating that it expected to miss Q2 targets, detailing that the core trading currencies had been impacted by XE fluctuations and that its corporate performance would be further dampened by lower sportsbook revenues.

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In 2016, Betsson has closed its services in a number of European markets as a consequence of a ‘more conservative’ company strategy  with regards to player jurisdictions.

Despite the challenges faced during the period, Betsson governance stated that the company was in strong position to recover in the second half of the year, pointing that it  had recorded a marked increase in new customers and player activity, furthermore its performance

Comment on H1 2016  corporate performance  Ulrik Bengtsson, CEO Betsson AB said;

“The results in the second quarter did not live up to our expectations. Many factors made the quarter challenging; primarily unfavourable currency effects, lower than average sportsbook margins and lower revenue in certain markets, partly due to regulatory changes. Betsson’s subsidiaries operate in a dynamic environment which is highly demanding. They have taken several actions in the past months in order to increase growth and thereby profitability.”

“The sportsbook offering and functionality have been improved considerably, new exciting products have been launched and our casino has been upgraded. These actions will have effect in future quarters, and we have already in the end of the second quarter seen a strong uplift in active customers. The third quarter has started with daily revenue significantly above the average of the second quarter.”

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