Losses Continue to Mount for Struggling Bingo.com11th November 2009 9:11 am GMT
Bingo.com Limited has reported total revenues of US$1.44 million for the third quarter ended September 30th, a fall of 8% on the corresponding period last year, with high cost of sales and other operating expenses contributing to the company's thirteenth successive quarterly loss since Q2 2006.
Bingo.com generated gaming revenues of $1.38 million during the quarter, a decline of 7% year-on-year and 5% on the previous quarter which the company attributed to the impact of the economic downturn in the UK economy, while advertising revenues contributed a further $52,762.
Cost of revenue consisting of deposit bonuses, hosting, payment processing fees, software licence fees and domain name purchase payments fell 5% to $962,525 in the period, due to fluctuations in the Pound - Dollar exchange rate.
Sales and marketing expenses increased 15% to $427,311 as the company attempted to increase its subscriber base through sign-up bonuses and incentives, while general and administrative expenses rose 3% to $420,647 due to an increase in the number of employees.
As a result of the revenue drop, Bingo.com incurred a net loss of $390,432 for the quarter, an increase of 45% on Q3 2008, marking the company's thirteenth consecutive quarterly loss.
"The effects of the economic downturn were evident in our third quarter results. Online bingo players have become quite sophisticated and, with an increase in the number of similar product offerings, individual player values have contracted," said Tarrnie Williams, Bingo.com CEO.
"In anticipation of this fact, we invested significant resources during the third quarter into a differentiated product that will soon be ready for release. The fourth quarter has started well and, when our new offering is live, we expect the business to be well positioned to return to growth and profitability."
For the first nine months of 2009, total revenues fell 1% to $4.27 million with a net loss of $901,108, a decrease of 18% on the same period last year.
As at September 30th the company held cash of $547,505 compared to $848,759 on June 30th.
Shares in Bingo.com Limited (Co. Profile) (OTCBB:BNGOF) gained 6.25% in trading yesterday and will commence trading today at $0.17 per share..