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NetEnt growth remains slow during Q2 period

NetEnt, the Swedish-based gaming solutions provider, saw revenues grow 7.6% year-on-year during the first half of 2018, totalling $97m for the Q2 period.

NetEnt

Revenue for NetEnt increased 5.9% year-on-year to $49m during the second quarter of 2018, during which the company appointed its new CEO, Therese Hillman, who has been tasked with overseeing the company’s current growth phase.

“During the quarter, we came up with a plan and started taking action in several areas to strengthen our customer offering, cut lead times, and free up resources for new commercial projects,” said Hillman.

“These changes are necessary for us to reassert our strong market position in online casino. I look forward to a busy autumn, focused on the turnaround of NetEnt, with improved efficiency and many new products and growth initiatives that all have players and customers in focus.”

These results were masked by the fact that a weaker SEK had a positive effect on reported revenues, as NetEnt revenues are invoiced and accounted for in Euros.

In Euros the company’s revenues actually fell by 0.8% during the second quarter and only increased 1.7% for the first half of 2018.

NetEnt claims that it has continued to not reach its revenue potential as it was “negatively impacted by a weaker development in the Nordics and in the UK".

However, both Southern and Eastern European market proved to be growing at a “high pace”, according to Hillman.

Opportunities in the US could also benefit future reports as NetEnt have a presence in New Jersey, where Hillman and NetEnt expect to take advantage of the US Supreme Court’s decision to repeal PASPA “if and when” the state’s market opens for online casinos.

Operating profit (EBIT) increased 1.2% during the second quarter to $16.7m. Game transactions also grew, up 7% to 10.8 billion in the second quarter, but “decreasing average bet sizes” over the past year meant that this had little impact on the company’s revenue.

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