37% Q1 earnings decline sees Fortuna revise 2016 corporate guidance

Per Widerstrom

A tough opening to its 2016 corporate performance, has seen Eastern European gambling operator Fortuna Entertainment revise its year guidance detailing an EBITDA drop ranging between 10-15%.

Updating the market on its Q1 2016 (period ending 31 March), Fortuna reported a group wagering increase to €251 million (up 26% on corresponding Q1 2015) combined with Gross Win revenues of €38 million (up 7.6% on corresponding Q1 2015).

However, the operator continues to be impacted by increased Czech Republic betting and lottery taxes (increase from 20% to 23%) combined with the abolishment of the online handling fees in Slovakia implemented at the end of February 2015.

Fortuna governance detailed that these factors had created ‘unfavourable margin developments’ for its gambling services, as the operator recorded a 37% decline in group EBITDA to €4.6 million.

Despite revising its 2016 expectations, Fortuna governance detailed that the operator was looking forward to the upcoming UEFA Euro 2016, a key period in which the operators aims to boost player engagement and wagering.

Fortuna detailed that although its margins had been impacted by regulatory factors, the company would continue its stance on organic growth for all its regional business divisions.

Per Widerstrom, CEO of Fortuna Entertainment Group commented on 2016 Q1 performance

“In the first quarter of 2016, the Company continued to deliver strong growth in Amounts Staked and we accepted total bets in the amount of EUR 251.7 million, which is 26.3% more than last year. The Amounts Staked grew double digits in all our key markets, primarily driven by the on-line betting growth and in particular mobile sports betting while retail grew low single digit. Our operating profitability measured by EBITDA was impacted by the increase in the betting tax rate in the Czech Republic, unfavourable margin development especially in February and by planned increase of operating costs to support future growth opportunities of the company,”

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