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Despite encouraging revenue increases, Ongame's US 70 percent decline pulled results down
With its full year losses exciting significant media coverage, bwin's report for 2006 received the attention of Associated Press, which explained that much of the loss was caused by depreciation charges related to the Austrian public company's Swedish acquisition Ongame.
The net loss came to Euro 539.6 million, against a net profit of Euro 6.38 million in the previous 2005 report.
Bwin said it booked an impairment charge of Euro 516.6 million for its Ongame unit, which has suffered a 70 percent revenue slide since Internet gambling was severely curtailed by the US Unlawful Internet Gambling Enforcement Act.
Bwin's gross gaming revenue came in at Euro 381.8 million in 2006, considerably up from Euro 144 million in 2005.
Bwin has changed its strategic approach as a result of the US legislation and the actions of European monopolies against it, and the company says that with a similar legal framework likely in the near future, the resulting savings should be reflected in first quarter 2007 figures.
The company said the Placanica ruling by the European Court of Justice in March also confirmed that the complete exclusion of betting and gaming providers by EU member states went beyond what was necessary to achieve those states’ intended objectives of protecting the public from moral and social ills.
Bwin said it was doubtful the state gaming monopolies were compatible with European Community law and that they were almost exclusively geared towards generating revenues for the state and were therefore not justified by “compelling reasons” of public interest.
Bwin expects the European legal uncertainty to continue for several more years due to strong recent political pressure to maintain the state monopoly situation and it would continue to call upon every legal option to combat such measures, especially by invoking European fundamental liberties such as the freedom to provide services and freedom of establishment.
Bwin said it had taken the necessary measures to consolidate its business and long term prospects. It will focus on core products and markets and with a reduction in marketing expenses, it is “...now more focused than ever on delivering sustainable, long-term profits and generating positive cash flow”.
Bwin also highlighted its development in non-EU markets with its acquisition of a betting license in Argentina, which will soon be operational. The company said its next big promotional push in Europe would be the 2008 European football championships in Austria and Switzerland.
In a more positive light, the company released financial highlights for the fourth quarter, which included gross gaming revenues of Euro 93.1million, compared with Euro 47.7million in 2005. Gross gaming revenues form sports betting came in at Euro 49.4 million, compared with Euro 29.6 million in Q4 2005, with margins of 9.1 percent.
Gross gaming revenues from the casino, poker and games sectors respectively amounted to Euro 18 million, compared with Euro 11.7 million in Q4 2005, Euro 22.1 million, compared with Euro 4 million in Q4 2005 and Euro 3.6 million, compared with Euro 2.5 million in Q4 2005.
Excluding US business, Bwin’s Q4 gross gaming revenues rose 13.5 percent to Euro 87 million compared with Euro 76.6 million in Q3 2006.
Bwin's quarterly number of active customers rose 84.2 percent on the 2005 figures, from 467 000 to 861 000, with 216 000 of them active for the first time, a 16.5 percent rise on 2005. Ex-US business, Bwin recorded 776 000 active and 213 000 new active customers in 2006.
Cost per new active customer rose to Euro 221, compared with Euro 145 in Q4 2005. The company said this was due to the legal uncertainty surrounding online gaming in Europe and that it was confident of reversing the trend as it reduced its marketing expenses and the legal framework evolved in favour of operators.
Following its exit from the US market, Bwin took a Euro 515.1 million hit due to the non–cash depreciation of the customer base and goodwill as a result of the Bwin Games (Ongame) acquisition. The write off of Bwin’s US assets contributed to an overall loss of Euro 539.6 million for the year, compared with Euro 6.4 million in 2005 The company said it took am additional Euro1.6 million hit as a result of Turkey banning private operators from offering bets to its citizens and its temporary withdrawal from that market in Q1 2007.
Annual gross gaming revenues came in at Euro 381.8 million, a rise of 165.2 percent on 2005, from nearly 2.1 million active customers and 1.3 million active new real money customers during 2006.
Gross gaming revenues from sports betting accounted for 45.7 percent of Bwin’s total gross gaming revenues and totaled Euro 174.5 million for the year, a rise of 84.3 percent on 2005. As a comparative figure, Bwin said the figure in 2005 was closer to 65.8 percent and that it may again rise to more than 50 percent after its exit from the US.
Rake from its poker platform came in at Euro 114.7 million in 2006, compared with Euro 9.9 million in 2005, and made up around 30 percent of all gross gaming revenues in 2006. Excluding US business, Bwin’s poker rake for 2006 was Euro 60.8 million, the company added that its Ongame poker network had been performing very satisfactorily, with up to 28 000 concurrent users and 65 percent real money players.
Bwin’s casino turnover rose from Euro 33.8 million in 2005 to Euro 78.9 million in 2006. Excluding US business, casino turnover rose to Euro 59.6 million.
With its decision to focus on the core products of sports betting and poker, Bwin said it decided to use licensed third-party software instead of developing its own in-house casino products. |
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发表于 2007-4-22 01:31
