Fortuna hit by Slovakia change

Fortuna hit by Slovakia change

Friday, May 8, 2015
Per Widerström became Fortuna chief executive late last year

European fixed-odds betting company Fortuna has seen a huge drop in first-quarter earnings due to a poor performance in sports betting and regulatory changes in Slovakia.

The Netherlands-based company’s new chief executive, Per Widerstrom, focused on impressive results in terms of amounts staked and gross win, noting big rises year on year.

However, total EBITDA of €7.4m ($8.3m) was a 21 per cent decrease over the same period of last year, with that total drawn from a 23.8 per cent decline in sports betting to €7.1m and the lottery EBITDA of €277,000, up 1,152 per cent over the last year.

The company said that gross win in Q1 was impacted by the abolishment of the handling fee on on-line betting in Slovakia, which apart from the absence of the fee itself led to a migration from retail to online, which created further gross win margin pressure.

Also, the company said that gross win in the first quarter was affected by unfavourable sporting results in March 2015.

“In the first quarter of 2015, the company continued to deliver strong growth in amounts staked and we accepted €199.3m of bets, which is 20.2 per cent more than last year,” said Widerstrom, whose company operates in the Czech Republic, Hungary, Poland and Slovakia.

“The amounts staked grew double digits in all our key markets, primarily driven by the on-line betting growth.”

The company, which earlier this year confirmed that it would not pay a dividend to shareholders in 2015 as it looks to invest in infrastructure, such as IT improvements, said that lower EBITDA is still in line with the full year guidance.

The amount staked on sports betting reached €194.6m in the first quarter of 2015, a 20.1 per cent improvement on the first quarter of 2014.

The amount staked on lottery betting in the first quarter of 2015 totalled €4.7m, a 23.7 per cent year-on-year increase.

The gross win from sports betting was €33.3m, a 3 per cent increase y-o-y. Of this figure, the gross win from on-line betting in the first quarter of 2015 increased to €19.9m, a substantial increase of 22.9 per cent over the same period of 2014.

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