iGaming affiliation firm Net Gaming reported drops in its revenue, EBITDA and post-tax profits for 2019.
Last year was described as “incredibly challenging” by Chief Executive Marcus Teilman, with multiple factors causing this decline.
Full-year results
In the 12 months ending on 31st December 2019, Net Gaming’s revenue totalled €14.3 million. This was 23.1% lower than 2018’s figure, which stood at at €18.6 million.
Profit before tax for 2019 surmounted to €5.3 million. This was a 36.9% decline on 2018’s figures. After paying €380,000 in annual tax, profits stood at €4.9 million – 37.2% lower than the €7.8 million in 2018.
Earnings before interest, tax, deprecation and amortisation (EBITDA) stood at €8.4 million, a 37.2% annual decline. Operating profit dropped from €12.2 million to €7.6 million, a fall of 37.7%.
Meanwhile, New Depositing Customers (NDCs) declined by 19%.
There were signs of this coming – in the first half of 2019, the company reported declines in both revenue and profit.
Teilman was far from happy with the end-of-year results, but also said he’s looking to ensure that 2020 is more fruitful. His words were as follows.
“In no way am I pleased with our earnings development, but I am firmly committed to returning to growth in all parts of the business during 2020. I believe that our EBITDA level bottomed out in 2019 and that it will increase in the coming year.
“During the year, we underwent an important change through the launch of our new technical platform and our establishment of a competent and more forward-looking organisation. In 2020, I look forward to being able to take advantage of all the interesting growth opportunities we have identified.”
Results for Q4 2019
Net Gaming has also released its financial results for the final three months of last year. During this time period, year-on-year revenue dropped by 29.8% to €3.3 million. According to the company, this was because of multiple changes to local regulation. A continuing shift from cost-per-acquisiton (CPA) to revenue share also contributed.
EBITDA also went down by 42.4%, hitting €1.9 million, while operating profit declined by 41.9% to €1.8 million.
In Q4, profit before tax also dropped by 58%. After paying this, the €610,000 total was 60% lower than the €1.5 million reported in the last three months of 2018.
Teilman also spoke about Net Gaming’s Q4 2019 results, with a positive outlook on the future.
“The end of 2019 saw us stabilising our EBITDA in the fourth quarter, despite sequentially lower revenues,” he said.
“During Q4, we made a strategic decision to invest in fewer but stronger products, and as a result, we have appointed a number of brand managers in order to create clearer control, focus and responsibility for each individual site’s results.
“This initiative is at an early stage, but we are already seeing results and several sites are moving in the right direction, with increased traffic and conversion rates.”
