Net Gaming forecasts profit slump of 200% in Q2 2020
Malta-based affiliate firm feels full force of Covid-19 as radical cost-saving measures are put in place
Net Gaming has warned post-tax profit could plummet by 200% year-on-year to -€1.2m after non-recurring costs and exchange rate fluctuation took its toll on the business. The affiliate firm is carrying out several cost-saving measures in H2 2020 to mitigate the negative financial impact of Covid-19, including closing its Swedish office to centralise the business in Malta. The reorganisation is set to save €0.3m per year, but will result in a non-recurring cost of €0.5m, which will be charged to Net Gaming’s Q2 EBITDA. The business has also pinpointed several other fiscal losses, including a further €0.5m impairment loss related to the PokerLoco brand, which will not be included in the new strategy put in place for the remainder of 2020. A €0.3m consent fee was also incurred following the refinancing of the business in Q2, while EUR/SEK exchange rate fluctuations of around €1.2m have adversely affected the balance sheet. Net Gaming’s Q2 2020 results will be unveiled in full on 13 August 2020, where revenue is expected to amount to €3.6m, 14% higher than Q1 2020. EBITDA is set to fall around 23% year-on-year to €1.6m. By 30 June, Net Gaming’s cash position is estimated to be between €3m-€3.2m with interest-bearing net debt recorded at €21.5m Net Gaming CEO Robert Andersson said there was some positive progress in Q2 and the reorganisation of the company would future-proof the business. Andersson added: ““The underlying operations have shown positive development during Q2, with sequential organic growth of 14%, but also compared with the previous year. “The offensive initiatives and the reorganisation we are now implementing create the conditions for future growth and a brand new Acroud AB that will stand stronger in the future,” he concluded.