NetEnt Reports Decreased Q3 Revenue
Volatility, thy name is NetEnt. The leader in casino games and gaming products has been riding a financial rollercoaster for years, and apparently more so than most of its global market contemporaries, when judging by revenue figures posted over the course of the last number of years. The latest quarterly reveal is everything but good news. NetEnt recently made known its financial figures for Q3 and a 10% year-on-year drop in revenue income is the latest challenge that the company will have to try and mitigate and compensate for.
Arguable more worrying even than the revenue decline is the fact that NetEnt has posted a rather significant 60% drop in profit made after tax for the period ending September 30th. Chief Executive Officer and former NetEnt CFO Therese Hillman has commented on the significant decline in revenue as well as profit and has contributed much of what has been reported to the worryingly weak developments in Sweden’s regulated market.
On Acquiring Red Tiger Gaming
Hillman explained that Sweden accounted for at least 7% of the 10% drop in revenue income, with the United Kingdom and Norway jointly responsible for the remaining 3% decline. When referring to actual profits after taxes, Hillman pinned the lower percentile to the acquisition of Red Tiger. Hillman however did not offer this information in an apologetic manner but says that it is offered up purely for profit explanatory purposes as the acquisition offers much in terms of future revenue synergies.
Acquisitions and significant financial investments often result in lower profits when considering a specific financial period in a company’s books. Lower profits resulting from the acquisition of market assets isn’t viewed as a fiscal negative in any way, or at least not until such time as what any new purchase or acquisition has shown itself to have been a poor financial decision on a company or entity’s part. This has not been the case with Red Tiger and despite it being too soon to tell whether or not Red Tiger was a solid deal because of the short lapse of time since the acquisition, the general expectation is that the synergy will serve NetEnt well in the long run.
Hillman Runs A Tight Ship
NetEnt has been battling various demons for what seems like the longest time but much of what has ailed the company during recent years has for the most part been successfully resolved by mainly Hillman’s strong hand of leadership. The fact that Hillman comes from a strong and solid financial management background has saved the NetEnt ship on more than one occasion.
NetEnt forked out a massive £220 million for full ownership rights to Red Tiger Gaming.