Net Gaming Europe, an affiliate marketing network listed in Stockholm, reports a net loss estimated for Q2 trading, largely due to the costs of company restructuring.
The organisation is expecting to post €1.6 m of EBITDA, tracking 10 percent lower than comparable Q1 2020 and 23 percent lower than its equivalent results in Q2 2019.
The reorganisation would see the firm shutting its Swedish headquarters and relocating the corporation to Malta in an effort to establish a more ‘efficient and cost-effective organisation,’ with estimated annual savings of €300,000 going into practise from Q3.
Net Gaming has demonstrated an impairment risk of €500,000 on PokerLoco brand-related properties which will no longer be included in the company’s 2020 growth plan, moving emphasis to fewer products.
Its company refinancing resulted in non-recurring charges of around €300,000 attributable to a consent fee paid on net financial products. This has been negatively influenced in the first two months of the quarter by fluctuations in the EUR / SEK exchange rate of about €1,2 m, as the bond debt is denominated in SEK.
Robert Andersson, CEO of Net Gaming said: “The underlying operations have shown positive development during Q2, with sequential organic growth of 14 per cent, but also compared with the previous year.
“It should be noted that a large proportion of the items having a negative impact on Q2 earnings are non-cash items and of an accounting nature. 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.
“With Sports betting on the doorstep and a company that is now optimised for the future, we feel strong as we embark on the growth journey we have begun. As proposed to the AGM, we also hope to be able to change our track to the new Acroud AB, which will be a new milestone.”
The Q2 2020 outlook study also highlighted that sales in Q2 2020 is projected to be €3.6 m, 12% higher than in Q1 2020 and 4% higher than in Q2 2019, respectively.
Reported profit after tax is expected to decline by €1.2 million , compared to € 2.8 million in profit earned in Q1 2020 and €1.2 million in Q2 2019, adversely affected by the above-mentioned non-recurring costs and fluctuations in the exchange rate associated with the financing of loans.
Adjusted for non-recurring costs and fluctuations in the exchange rate, the adjusted profit after tax amounts to €1,4 m for Q2 2020.