Cosmopol Closure Continues To Disrupt Svenska Spel’s Trading

As the state-owned operator posted a 14 percent decrease in group Q4 net gaming revenues to SEK 2,212 million, the enforced closure of Sweden’s Casino Cosmopol venues continues to disrupt Svenska Spel trading (Q4 2019: 2,247 million).

Svenska Spel has estimated that if the venues of Casino Cosmopol remain closed for a further quarter, it would face a corporate revenue hit of SEK 250 million.

11 percent decrease in operating income

Svenska Spel announced an 11 percent decrease in operating income in Q4 to SEK 690 million, down from SEK 775 million in Q4 2019, along with a further restriction on its ‘Vegas’ arcade halls.

Svenska Spel would ‘reorganise’ its Casino Cosmopol business, which the company said will ‘affect more than 200 workers,’ following a review of its strategy to address Covid headwinds.

While its land-based casino operations continue to absorb major shocks, Svenska Spel has expressed trust in its long-term commercial strategy as the company profits from its updated digital platforms.

Lottery division

For its lottery division, Svenska Spel announced a ‘record-breaking’ Christmas sales season in which 48 percent of sales were processed through its digital platforms, up from 34 percent in 2019.

Svenska Spel, reporting on its full-year operations, emphasised ‘hard comparatives’ with the results of previous years, as the state-owned company absorbed SEK 441 million (EUR 45 million) in operating losses associated with its closed Cosmopol units.

Svenska Spel delivered group operating income of SEK 2,395 million amid its casino impairment, reflecting a 3 percent decrease compared to the full-year figure of SEK 2,466 million in 2019.

Svenska Spel accomplished its social responsibility targets by supplying Swedish charities with an additional SEK 455 million in corporate income, as its 2020 donations to Swedish good causes totaled SEK 1.8 billion, a new company record.

Good profitability for the Group

Patrik Hofbauer, President and Group CEO of Svenska Spel said: “We have good profitability for the Group and strengthen the operating margin for both the quarter and the full year 2020, despite the fact that our physical casinos have been closed for three quarters.

“As in the previous quarter, revenues for our Sport & Casino and Tur business areas are increasing.”

“This shows strength and stability that two out of three business areas deliver growth despite the fact that they are also affected by covid-19 in the form of temporary gaming responsibility measures and reduced sales in stores.”