Fortuna profits hit by new tax headwinds
Operator's online sports betting gross win rises, but total EBITDA drops by 37%
Higher betting tax rates and the removal of online handling fees saw Fortuna post a 37% decrease in EBITDA for the first quarter of 2016 this morning, despite seeing a double-digit rise in its online gross win.
The firm’s online sports betting gross win increased by 19.7% to ?23.8m (18.8m) during the three-month period, while total turnover, which includes its retail division, rose to ?251.7m (?198.6m) in Q1, an increase of 26% compared to the same period last year.
The operator said underlying growth had been driven by online betting and mobile, however, EBITDA totalled ?4.6m (?3.6m) for the period, with the 37% drop largely attributed to the introduction of a higher betting tax rate in the Czech Republic in January and the abolishment of the online handling fee in Slovakia at the end of February 2015.
The firm added unfavourable margin developments in February and the anticipated increase in group operating costs were also factors in the slump.
“The amounts staked grew double digits in all our key markets, primarily driven by the online betting growth and in particular mobile sports betting while retail grew low single digit,” Per Widerstrom, CEO of Fortuna Entertainment Group, said.
The company said organic growth would continue to be driven by online betting with an additional boost expected from this summer’s 2016.
It forecasted amounts staked could reach ?1,010m in 2016, while EBITDA would decline by up to 15% across the year.