Popular online casino and gaming content supplier Netent has had a tough 3rd quarter. The company posted a 10 percent decline in revenue and a 60 percent drop in profits after tax for the third quarter to September 30.
CEO Therese Hillman has attributed the drop in revenue to “weak developments” in the Swedish market.
The content supplier grossed SEK443m for the third quarter representing a 10 percent year-on-year drop in revenue.
“The primary reason for the lower revenues was attributed to continued weak developments in the Swedish market. Sweden accounted for seven percent of the decrease, but Norway and UK also had a negative impact on revenues,” Hillman explained.
Netent’s EBITDA during the period dropped by about 15 percent year-on-year compared to Q3 2018, to SEK196m (€18.3m). Its profit after tax was SEK97m (€9.1m) which is a whopping 60 percent decline.
In a statement to the press, Hillman wrote: “The most significant event of the quarter was the strategically important acquisition of Red Tiger. The two companies complement one another well, both in terms of geography and product offering, and together we believe we can attain a stronger market position and realize economies of scale throughout our business.
“The main objective of the deal is to drive growth and we estimate that the transaction can result in annual synergies of at least SEK150m, of which a large part will come from revenue synergies.”
Last month, NetEnt completed the acquisition of online casino and gaming content supplier Red Tiger by paying £220 million.
The acquisition deal also came as a surprise to many as it is the first acquisition deal struck by the global gaming content supplier. Following the honoring of the deal NetEnt will now take charge of operations at Red Tiger.