CryptoLogic 2009: revenue falls 36%
CryptoLogic's revenue dropped more than a third in 2009, but president and chief executive Brian Hadfield expressed optimism for a good 2010 following strategic cost cutting
CRYPTOLOGIC’s revenue fell by more than a third in 2009, the software supplier’s financial year-end figures show, but president and chief executive Brian Hadfield expressed confidence that the company is in good shape for the year ahead. He cited new licensing deals and a substantially reduced cost base as grounds for optimism.
The company put the 35% year-on-year (YoY) fall from $61.5m in 2008 to $39.8m in 2009 down to “lower wagering activity across the industry, adverse currency factors and a reduced contribution from a key licensee”.
Crypto also recorded a net loss of $35.5m. This was 9% greater than last year’s $32.7m but reflected $24.8m of one-off charges for asset impairments and restructuring to align the company’s costs with its revenue base.
These include CryptoLogic’s divesting of its poker network to GTech G2, eliminating the costs of a standalone business and enabling it to cut quarterly operating expenses by 25% on a year-on-year basis.
The total annual recurring cost base, which comprises operating, general and administrative, finance and amortisation expenses, reduced by $20.6m to $55.0m
CryptoLogic’s Hadfield said: “2009 was a tough year as a number of adverse factors including a global economic downturn overshadowed the company’s progress in implementing its new strategy to reduce costs and return to growth. We have entered 2010 in better shape with a substantially reduced cost base that will continue to be managed tightly.”
Total dividend for the year amounted to $1.4m (2008: $5.4m), and no dividend was declared in the fourth quarter.
Highlights for the company during the period included 20 new licence deals with operators including Betfair, Betsafe, Sportingbet, Totesport and Virgin Games, expanding its licensee base to more than 30 operators.
Crypto also signed deals with DC Comics, a division of Warner Bros, to develop betting games featuring Batman, Superman and Wonder Woman; and with Paramount Digital Entertainment for games based on 20 movies including Braveheart, Forrest Gump and Ghost.
Fourth quarter highlights include the re-launch of CryptoLogic’s virtual casino lobby, relocating from Cyprus to Malta and signing three major licensees for branded games – BetClic, GigaMedia, Rank Interactive and UniBet.