Svenska Spel reports net revenue decrease in rocky Q1
Swedish lottery and gaming operator Svenska Spel has reported net gaming revenue of SEK1.93bn (£156.6m/€185.5m) for the first quarter of 2022, as only one of its main business segments experienced revenue growth.
This was a decrease of 3.2% year-on-year, which Svenska Spel attributed in part to the cancellation of sports games and limited casino opening hours at the beginning of 2022 due to the Covid-19 pandemic.
In terms of business areas, Svenska Spel's Tur offering – its lottery business – reported revenue of SEK1.13bn for the first quarter. This was down 6.3% compared to Q1 2021.
Online sport and casino made up SEK556m of the total net revenue, a decrease of 14.1%. Patrick Hofbauer, president and CEO of Svenska Spel, explained that this loss was due to a combination of the Covid-19 pandemic and responsible gaming measures. “This is mainly due to the large impact of the pandemic due to cancelled sports events at the beginning of the year, but also to our strengthened gambling response measures that have been introduced so that customers do not play for more than they can afford and with special care for our young customers,” he explained.
Revenue for the Casino Cosmopol land-based business, plus its Vegas brand of slot halls and its chain of restaurant casinos was up 81.6% to SEK240m.
“The start of the year was still challenging for both our land-based casinos and the Vegas vending machines due to the pandemic restrictions,” Hofbauer continued. “After the restrictions were lifted on 9 February, our Casino Cosmopol has expanded its opening hours and gradually returned to a larger range of games.”
Breaking this net gaming revenue down by sales channel instead, online made up almost half of the total at SEK962m, falling by 5.3% year-on-year. Retail lottery agents sales brought in SEK732m of the total net revenue, down by 11.5%. Restaurant casinos and slot halls brought in net revenue of SEK138m, while casino and land-based amounted to SEK102m.
Net other income came to SEK77m, compared to SEK38m in net other costs in 2021. After gambling taxes of SEK355m and direct gaming business costs at SEK248m, the total net sales from gaming came to SEK1.40bn – up by 6.6%.
Operating expenses for the quarter were SEK818m, up by 12.5%. Svenska Spel attributed the rise to sponsorship, IT investments and the rise in casino operations.
Breaking this down, personnel costs amounted to SEK279m, SEK18m more than in Q1 2021. Other external expenses rose from SEK374m to SEK452m. After amortisation and write-downs of intangible and tangible fixed assets at SEK87m, total operating profit came to SEK595m, down by just SEK3m from Q1 2021.
“Despite challenges during the first quarter, I look forward with confidence to the rest of 2022,” said Hofbauer. “We continue to provide our customers with entertaining gaming experiences in a responsible manner, as we want gaming to be a joy for everyone.”