LeoVegas records net profit decrease for Q2 despite 1% revenue rise

LeoVegas Group has reported a 1% revenue increase for Q2, but rising expenses contributed to a bottom-line loss of €407,000 ($420,346).

leovegas q2 2022 gambling insider web image

Overall, the company’s second quarter revenue totalled €98m, up year-on-year from €96.8m. However, this modest increase was offset by higher personnel costs and operating expenses.

The former constituted 16.5% of LeoVegas Group’s Q2 revenue, up from 14%, due primarily to an enlarged workforce.

Meanwhile, operating expenses totalled more than 17% of the company’s second quarter revenue, up from nearly 8% last year.

This figure, which LeoVegas described as “abnormally high,” was attributed to costs associated with MGM Resorts’ takeover bid, alongside a provision for a regulatory fine in the UK and the company’s US expansion.

Marketing expenses, however, actually shrank year-on-year. These fell from €37.6m to €31m, though this wasn’t enough to mitigate a drop in profitability.

For Q2, LeoVegas Group’s net profit decreased from €1.08m to a loss of €407,000. EBITDA likewise fell, going from €9.8m to €5.4m – a 45% drop.

On a half-year basis, a similar trend is visible. While LeoVegas Group’s H1 revenue rose year-on-year, climbing by 2%, its half-year net profit amounted to a loss of €7.4m, down from an income of €3.5m.

LeoVegas CEO Gustaf Hagman described the quarter as “eventful,” and said the company generated record sports betting revenue.

“Most of the main markets continue to develop well and we cannot see any signs to date that the current macro situation with high inflation and rising interest rates is impacting the habits of our players,” Hagman said.

“Once again, Sweden stuck out during the quarter with strong performances for the LeoVegas and Expekt brands.”

He also commented on MGM Resorts’ takeover bid, remarking: “It seems likely that the bid will be accepted, which would lead to the company’s shares being delisted from Nasdaq Stockholm later in the year.

“Regardless of the outcome of the bid, business remains as usual, and we are continuing to work relentlessly to create the industry’s premium gaming experience for our customers.”

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