Healthy growth and strong cash flow
OCTOBER - DECEMBER
- Net sales reached SEK 71.7 M (48.1), an increase of 49% compared to the same
period of last year and the highest quarterly sales on record.
- Cash flow from operating activities was SEK 20.7 M (-31.8).
- Profit before depreciation/amortization and impairments (EBITDA) was SEK 8.4
M (-7.7).
- The operating loss was SEK 6.4 M (10.1), and was charged with non-cash
impairments of SEK 11.7 M.
- The loss after tax was 22.3 M (profit of SEK 0.4 M).
- Earnings per share were SEK -0.05 (0.00).
JANUARY - DECEMBER
- Net sales for the full year amounted to SEK 234.6 M (208.5)
- The loss after tax for the period was SEK 18.5 M (profit of SEK 1.6 M excl.
discontinued operations).
- The loss after tax for the full year was SEK 33.2 (profit of SEK 8.5 M excl.
discontinued operations).
- Earnings per share were SEK -0.07 (SEK -0.02 excl. discontinued operations).
- Cash flow from operating activities was SEK 31.7 M (18.4).
Comments from the CEO
It is satisfying to see that the strategy we have followed since the summer of
2007 has been the right one. Our four cornerstones of streamlining, revenue
focus, cost control and product development permeate all aspects of our
operations and today Entraction is a company with a profitable business and
well grounded optimism for the future.
We increased our net sales by 49% to SEK 71.7 M (48.1), partly thanks to a
changed pricing model. Our financial situation and freedom of action were
strengthened in the fourth quarter when we posted a positive cash flow of SEK
24.1 M (45.4). The number of active players increased by 16% compared to Q3 and
our ambition to focus on revenue streams from all gaming verticals has
contributed to our powerful growth, including higher casino revenue in Q4 alone
than in the entire year of 2006.
Our operating activities generated a positive result of SEK 5.3 M in Q4. The
operating loss of 6.4 M for the fourth quarter reflects an impairment charge of
SEK 11.7 M on the contract with Betdaq which had no effect on cash flow or
operating activities. The background for this is a strategic agreement signed
in October 2007 between Entraction and Betdaq giving Betdaq an option to
subscribe for 125 million class B shares. The value of the option according to
the Black & Scholes model is SEK 13.5 M, which is thus the carrying amount of
the customer contract. Since this is higher than the value of anticipated
revenue from the contract with Betdaq in 2008, we have recognised an impairment
loss of SEK 11.7 M on the contract for reasons of caution.
So far, the success of the Betdaq collaboration has surpassed expectations.
Aside from the launch of poker on Betdaq.com and upcoming launch on
Pinnaclesports.com, we are in discussions with a number of possible
international partners as a direct result of this agreement.
It is clear that the positive trend from Q4 has continued in the first months
of the current year, which indicates a strong first quarter.
