Bwin.party Revenue Falls 2% To €801m In 2012

Bwin.party has just released its full year results for 2012, revealing a 2% drop in revenue to €801.6 million compared to €816 million for the previous year. In addition, the online gaming group reported a 17% decrease in EBITDA (earnings before interest, taxes, depreciation, and amortisation) to €164.9 million, down from €199.3 million in 2011.
A big part of Bwin.party’s revenue decline was accounted for by a new 5% gaming tax introduced in its core German market in July last year. Bwin.party said it also expects future short term earnings to be affected as it focuses on regulated markets, and as chief executive Norbert Teufelberger explains:
“Our transition to focus on fewer markets and reduce the complexity and scale of the business has hit our short-term targets but we think we are on the right path for the long-term.”
Breaking the figures down further, sports betting and casino revenues remained fairly flat, while bingo and poker both experienced declines due to reduced consumer spending, specifically in southern Europe. Overall, in 2012 poker declined by a hefty 17% to €219 million compared to €263.8 million in 2011. More worryingly, the rate of decline was even steeper than the 10% poker drop reported in 2010.
Following news of its 2012 results, shares in Bwin.party fell by 7% giving it a valuation of around £1.2 billion. Commenting on the future prospects of the company, Davy analyst David Jenning, said: “The change to a more focused approach on a smaller number of commercially attractive markets is undoubtedly the way to go..but is not without its risks; failure to execute perfectly could lead to painful earnings revisions.”