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Fortuna records double-digit growth across all online betting markets

9th May 2013 7:33 am GMT

Despite continued growth from its online sports betting operations during the first quarter of 2013, Central European gaming operator Fortuna Entertainment Group has warned that the sports betting market in Czech Republic will become significantly tougher after the abolishment of service fees for online betting.

Fortuna said that the Czech sports betting market has gained “new dynamism” following the abolishment of service fees for online betting in the Czech Republic.

The company claims that Czech bettors that had previously bet off-shore, having been discouraged by the service fee charged by local operators, have recently been migrating back to on-shore players in the Czech market.

“As a result, the competitive situation on the Czech market has suddenly become tougher as local betting operators have been presented with a unique chance to attract new clients and increase market share,” said the company in a statement earlier this week.

Sports betting in the Czech Republic generated more than a half of Fortuna’s total amounts staked for the first quarter of 2013.

Amounts staked on sports betting rose 26 per cent to €137.1m, while lottery amounts staked contributed a further €4.2m during the period.

Q1 2013 Results

Euros (€) Q1 2013% Change
    
Amounts Staked 141.2m24.0%
Gross Win 33.5m9.0%
Revenues 28.8m5.5%
EBITDA 11.3m34.4%

Total amounts staked climbed 24 per cent to €141.2m during the quarter, generating gross of €33.5m, up 9 per cent year-on-year. Online sports betting gross win was up 34 per cent to €13.6m, offsetting a 1 per cent decline in retail betting.

The company generated an EBITDA of €11.3m for the quarter, up 34 per cent compared to the same period last year.

“We are pleased to once more report very solid results, this time for the first quarter of 2013,” said Fortuna CEO Radim Haluza. “The results confirm a continuation of the strong momentum that started at the end of last year.

“The main driver of our performance was clearly the online segment in sports betting which continues to deliver double-digit growth in all the countries where Fortuna is present. In addition, we are reporting positive EBITDA in the lottery segment for the first time, which has also boosted our profitability.”

Fortuna said that total amounts staked in the Czech Republic grew at a double-digit rate compared the same period last year, due to higher betting volumes. Gross win also climbed year-on-year following strong online growth, which offset a decline in retail sports betting in shops.

Slovakia represented less than one third of the company’s amounts staked, but benefited from double-digit growth during the quarter. Gross win grew in both the retail and online betting segments.

Fortuna said that it has appointed Marek Biely as CEO of Fortuna Slovakia and chairman of the management board of Fortuna SK, replacing Milan Alakša. Biely was previously CEO of Fortuna Slovakia between 2006 and 2011 but left to join Czech lottery company SAZKA where he most recently served as chief operating officer.

In Poland, total amounts staked grew at a double-digit rate, driven by the introduction of online betting at the start of the year and by the takeover of the former Tipsport retail shops. Retail continues to generate the majority of gross win in Poland, although a relatively high growth level was recorded by its online business.

Amounts staked from the Fortuna Lottery amounted to €4.1m during the quarter, generating gross of €2.1m. The business generated its first positive EBITDA during Q1 since its launch in 2011.

Fortuna’s management anticipates that the planned break-even point for the lottery project in the first half of 2013 will be achieved. The company is also discussing strategic options concerning the future development of the Fortuna Lottery.

“A strategic partner could assist in a further development of products and the distribution network and also share costs,” said the company. “The previously agreed disposal of up to a 10 per cent stake in Fortuna Lottery to E-invest should not be affected by any new transaction.”

Fortuna’s management board has proposed a gross dividend of €0.67 per share, comprising €0.23 from consolidated 2012 net profit, €0.10 from retained earnings and €0.34 from share premium distribution.

Shares in Fortuna Entertainment Group (Co. Data) (PSE:FOREG) are currently trading at CZK107.95 per share in Prague this morning.

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