LeoVegas Doubles First Half Profits in Q2 2020
The Sweden-based online casino operator LeoVegas has reported record revenue and a net profit in the first half of the year, as the profit boosted by a record profit in the second quarter. Revenue for the six months that end on June 30 has hit €200.2 million, from €180.7 million in the same period last year, so there is an increase in revenue up to 10.8 %.
This is the online-only, casino-focused business that has performed quite strongly when other casinos with significant sports betting operations or retail presence faced disruption because of the Covid-19 pandemic.
The total sales cost was €35 million that included the gaming duties €30.6 million, and the personal cost remained quite steady at €25.3 million. The marketing also spend rose by 5.1 % to €64 million.
The second quarter was undoubtedly strong as it saw a record €110.7 million in revenue, which is up to 17.3 % compared to the last year. There was a record of customer growth with 195,329 for the customers who deposited new in the quarter.
The total deposits were €355 million in the second quarter, which is up to 23.4 % of the 2019 Q2. The main revenue was through the core casino business, while 74 % was via mobile. Fifty-one % of the net gaming revenue was given by the rest of Europe that was followed by Nordics, which is 34 % and 15 % for the rest of the world.
The Chief Executive of LeoVegas Gustaf Hagman said that he is very satisfied with how LeoVegas handled the Covid-19 situation and conducted their casino business without any noticeable disruptions, despite different challenges like not being able to meet in the daily work.
Gustaf also said that the casino industry, like many other sectors, had experienced a sort of structural shift from offline to online. Owing to the online position of LeoVegas, the appreciated brands, and also a proprietary technical platform, LeoVegas stood strong in a world that is increasingly digital.
Another main reason is the record large customer base support that LeoVegas has entered the quarter with, and with the ability to adapt to the new conditions, the positive trend continued from the first quarter.
LeoVegas also expects to see a continuing trend, noting that the revenue for the month of July was up to 4.8 % as compared to the last year. Gustaf Hagman also said that he would continue to focus on delivering sustainable and profitable growth, mainly for the shareholders, for offering a safe gaming and entertaining experience for LeoVegas customers all over the world. The long-term vision of LeoVegas is to be the king of the casino.
During the quarter, various countries implemented different measures to reduce the risk of problem gaming in connection with Covid-19. On top of all the restrictions, LeoVegas chose to implement its own protective measures to strengthen the player’s protection.
Most of the temporary restrictions related to Covid-19 throughout Europe ended in June, while Spain and the UK reverted to the normal regulations on their respective societies’ opening. Therefore, it is quite remarkable that Sweden, having massive criticism from different areas, moved in the opposite direction and introduced the temporary restrictions that were particularly focused on the online casino business, effective July 2.
Hagman also said that LeoVegas had delivered continued profitability and growth during the time of exceptional circumstances that occurred around the world. LeoVegas also published an update on the third quarter, thus revealing to the people that it was able to generate around €30.7 million in the month of July. Hagman says that the growth will continue throughout the quarter as the gaming market will be returning to its normal environment.
During the quarter, LeoVegas launched their brand in a number of English-speaking countries. This is a multi-brand strategy, and there is great potential, as the start has been promising, and many additional markets are to be expected.
The gaming market has been able to return to a much more normal environment in July, as the player shift has been seen from casino to the sports betting as the major sports leagues have restarted.
One can see a positive trend in the customer base that is continuing in the third quarter of 2020, as the number of depositing customers has increased by 34 % in July as compared with the same period a year back. This is a new record level for a single month, and LeoVegas will continue the high rate of investment during the third continuous quarter.
The current assessment is that the marketing costs will be inline or maybe a little higher than that was during the second quarter.
LeoVegas had favourable development in most of the markets in the second quarter. The main reason for the growth was a very large customer depositing base that grew around 24%. The rest of the European region has experienced exceptionally high growth, whereas Italy has posted a strong performance record.
The effects that have been related to Covid-19 have been judged to overall have had quite a positive impact on the NGR during April and May, as the markets were fully shut down during this particular period. In these particular markets, LeoVegas has taken the market shares, especially from the land-based gambling industry. Keep in mind that the effect of revenue that is related to Covid-19 has been negative in Sweden in the quarter.
There is no doubt that LeoVegas has cemented its foot as being the number one mobile casino operator. This brand has won various awards for its Mobile Casino and Native App. LeoVegas also tend to ink their games with different game studios to release exclusive slots designed specifically for optimal performance and smooth navigation on your mobile.
LeoVegas has committed considerable resources to deliver cutting-edge technology. We see that this technology is always improving, and the latest LeoVegas improvements bring us to the brand new Multiplay feature and change the operator in the mobile lobby.